The cost benefit constraint recognizes that:
A)the costs of providing information to users should be less than the benefits.
B)the expenses of an operation should be less than the revenues.
C)the expenses and revenues associated with a transaction should be reported at the same time.
D)all of the above.

Question

Quizplus · Accepted Answer

The cost benefit constraint refers to the principle that the costs of providing information should not outweigh the benefits derived from that information. It ensures that financial reporting is practical and cost-effective. Option B is incorrect because it refers to the matching principle, which requires the recognition of expenses when they are incurred and matched with the revenues they generate. Option C is incorrect because it does not relate to the cost benefit constraint.

The Cost Benefit Constraint Recognizes That