Each year there was an increase in the market value of some stock owned by the Mudstream Company,but the accountant did not record the increase in asset value and equity until the stock was sold.In this situation,the accountant
A) followed the matching principle.
B) followed the realization principle.
C) violated the accrual principle.
D) violated the matching principle.

Question

Quizplus · Accepted Answer

The realization principle states that revenue and gains should only be recognized when they are realized, such as when the stock is sold, which is what the accountant did.

Each Year There Was an Increase in the Market Value