As Part of the Objective of General-Purpose Financial Reporting, There

question 25

Multiple Choice

As part of the objective of general-purpose financial reporting, there is an emphasis on "assessing cash flow prospects." Under International Financial Reporting Standards (IFRS) this is interpreted to mean:

• A) Cash basis accounting is preferred over accrual based accounting.
• B) Information about the financial effects of cash receipts and cash payments is generally considered the best indicator of a company's present and continuing ability to generate favorable cash flows.
• C) Over the long run, trends in revenues and expenses are generally more meaningful than trends in cash receipts and disbursements.
• D) All of the choices are correct regarding "assessing cash flow prospects" under IFRS.