Faithful Representation Is a Characteristic of External Financial Reporting That

question 49

Multiple Choice

Faithful representation is a characteristic of external financial reporting that means:

• A)the financial reports of a business are assumed to include the results of only that business's activities.
• B)financial information can be compared across businesses because similar accounting methods are applied.
• C)the results of business activities are reported using an appropriate monetary unit.
• D)financial information depicts the economic substance of business activities.

---

Definitions:

Marginal Expenditure Curve

A graph that shows the additional cost of purchasing one more unit of a good or service.

Labor Supply Curve

The graphical representation of the relationship between different levels of wage and the quantity of labor willing to be supplied.

Monopsony

A market situation where there is only one buyer facing many sellers.

Economic Rent

Earnings exceeding the minimum amount required to keep a factor of production in its current use.