A cause-and-effect relationship is implicit in:
A) Realization.
B) Historical cost.
C) Matching.
D) The going concern assumption.

Question

Quizplus · Accepted Answer

Matching is the accounting principle that requires expenses to be matched with the revenues they helped to generate, creating a cause-and-effect relationship between the two. For example, the cost of goods sold is an expense that is directly related to the revenue earned from the sale of those goods. Therefore, expense recognition is dependent on revenue recognition, and the two are linked in a cause-and-effect relationship. The other options do not necessarily imply a cause-and-effect relationship.

A Cause-And-Effect Relationship Is Implicit In