The Principle of Faithful Representation

question 71

Multiple Choice

The principle of faithful representation

• A) Requires that information be complete, neutral and free from error, so assets and income are not overstated, and liabilities and expenses are not understated
• B) Requires that a company use the same accounting methods period after period
• C) Requires that revenues and costs be reported in the period in which they are earned or incurred
• D) Requires that all items of a material nature be included in financial statements
• E) Requires that all inventory items be reported at full cost

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Definitions:

Autotroph

Organisms that produce their own food from inorganic substances, using light or chemical energy.

Cyanobacteria

Photosynthetic bacteria that are often found in aquatic environments, capable of producing oxygen through the process of photosynthesis.

Aerobic Respiration

The process of producing cellular energy involving oxygen. It's the way most cells generate ATP, with carbon dioxide and water as byproducts.

Ozone Layer

A protective layer in Earth's stratosphere that absorbs most of the Sun's ultraviolet radiation, shielding the planet from harmful UV light.