Which of the Following Is a Valid Argument for Separate

question 31

Multiple Choice

Which of the following is a valid argument for separate accounting principles for proprietary activities?

• A)Two separate measurement focuses and bases for accounting within the same set of financial statements are confusing.
• B)There are no clear-cut distinctions between business and non-business activities.
• C)The measurement focus on all economic resources is more consistent with the GASB's objectives that financial reporting should provide information to determine whether current-year revenues were sufficient to pay for current-year services.
• D)Surveys of statement users indicate that information on depreciation is not of high priority to governmental decision makers.

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Definitions:

Expected Rate of Return

The anticipated return on an investment, based on the probability of various outcomes, including both risky and risk-free returns.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, often used in finance to gauge investment risk.

Risky Asset

An investment that holds a significant chance of losing some or all of its value, offering the potential for higher returns to compensate for higher risk.

Risk-Averse

A characteristic of investors who prefer lower risk investments, opting for certainty and stability in their investment choices.