Which of the Following Characteristics Exist in Critical Accounting Communications

question 101

Multiple Choice

Which of the following characteristics exist in critical accounting communications?

• A)the nature of the estimate is material due to the levels of subjectivity
• B)judgment is necessary to account for highly uncertain matters or the susceptibility of such matters to change
• C)the impact of the estimate on financial condition or operating performance is material
• D)All of these answer choices are correct.

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Definitions:

LIFO

An accounting method for valuing inventory that assumes the last items produced or purchased are the first ones sold.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus cost of goods sold.

Overstated

A term used to describe financial statements that report a value or condition as being higher than it actually is.

Understated

Refers to figures or amounts that have been reported lower than they actually are, often affecting financial statements and analysis.