The materiality constraint:

Multiple Choice

• Prescribes that a company record the expenses it incurred to generate the revenue reported.

• Prescribes that accounting information is based on actual cost.

• Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

• Prescribes that only information that would influence the decisions of a reasonable person need be disclosed.

• Provides guidance on when a company must recognize revenue.