Which of the Following Is True About Understandability as a Qualitative

question 46

Multiple Choice

Which of the following is true about understandability as a qualitative characteristic of financial statements?

• A) The onus to prepare understandable statements and to be able to understand them lies with the preparer.
• B) Where the underlying transactions or economic events are more complex, the user is expected to understand them without the assistance of an advisor.
• C) The onus to prepare understandable statements and to be able to understand them lies with the preparer and the user.
• D) Users with no knowledge of business and financial accounting matters are expected to understand the financial statements.

---

Definitions:

Prices

The amount of money expected, required, or given in payment for something, reflecting the value of goods or services in monetary terms.

Highest Price

The maximum value that has been paid for a good or service in a particular market or setting.

Market Price

The existing rate at which a product or service is available for purchase or sale in a specific market.

Patent Protection

Legal rights granted to inventors preventing others from making, using, or selling their invention for a limited period.