Question

The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is:a. called the matching principleb. called the consistency principlec. nonexistent; that is, there is no such accounting requirementd. called the physical flow assumption

Answer 1

Answer: C nonexistent; that is, there is no such accounting requirement.

Explanation: there is no accounting

assumption that requires that the cost flow be consistent with the physical movement of goods.

Instead, the movement of money (real or virtual) is tracked using a cash flow statement; income and profit matches revenues to the timing of when products/services are delivered—a company’s net income can actually be materially different from its cash flow.