To obtain a slightly more accurate measure of net income, Gabrielli Company has determined that it must hire two full-time accountants. However, if it decides against the hiring, it has followed the convention of
A) full disclosure.
B) materiality.
C) comparability.
D) cost-benefit.

Question

Quizplus · Accepted Answer

The choice of whether or not to hire two full-time accountants is based on a cost-benefit analysis, as the company must weigh the cost of hiring them against the potential increase in accuracy of net income. This aligns with the principle of cost-benefit, which requires companies to consider the costs and benefits of their accounting decisions.

To Obtain a Slightly More Accurate Measure of Net Income