Which of the Following Is an Assumption Made in the Preparation

question 49

Multiple Choice

Which of the following is an assumption made in the preparation of the financial statements?

• A) Financial statements are prepared for a specific entity that is distinct from the entity's owners.
• B) The current market value is assumed to be less relevant than the original cost paid.
• C) The preparation of financial statements for a specific time period assumes that the balance sheet covers a designated period of time.
• D) Financial statements are prepared assuming that inflation has a distinct effect on the monetary unit.

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Definitions:

Obsessive-Compulsive Disorder

A mental disorder characterized by recurrent, unwanted thoughts (obsessions) and repetitive behaviors (compulsions).

Obsessive-Compulsive Personality Disorder

A mental disorder identified by an ongoing obsession with being orderly, perfect, and in control of both one's own thoughts and relationships, sacrificing adaptability, openness, and effectiveness in the process.

Order

The arrangement or disposition of people, items, or concepts in relation to each other following a particular sequence, pattern, or method.

Obsessive-Compulsive Personality Disorder

A personality disorder characterized by a pervasive pattern of preoccupation with orderliness, perfectionism, and mental and interpersonal control, at the expense of flexibility, openness, and efficiency.