Which of the following accounting concepts best justifies the use of accruals and deferrals?
A) Cost/benefit constraint
B) Unit-of-measure assumption
C) Continuity assumption
D) Materiality constraint

Question

Quizplus · Accepted Answer

The continuity assumption assumes that a business will continue to operate indefinitely. Accruals and deferrals are necessary to accurately measure a company's financial performance and position over a continuous period of time, which is necessary under the continuity assumption. The other options do not directly relate to the use of accruals and deferrals.

Which of the Following Accounting Concepts Best Justifies the Use