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:

Focused

The state of having concentrated attention or effort on a particular task, object, or activity.

Leading Question

A question that suggests the answer or contains the information the examiner is looking to have confirmed.

Desired Answer

The specific outcome or information one hopes to achieve or receive in response to a question or investigation.

Closed-Ended Question

A type of question that limits the respondents' answer to a set of choices.