The Objectivity Concept Requires That

question 219

Multiple Choice

The objectivity concept requires that

• A) business transactions be consistent with the objectives of the entity
• B) the Financial Accounting Standards Board be fair and unbiased in its deliberations over new accounting standards
• C) accounting principles meet the objectives of the Securities and Exchange Commission
• D) amounts recorded in the financial statements be based on independently verifiable evidence

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Definitions:

NSF Checks

Checks that cannot be processed due to insufficient funds in the account on which they are drawn.

Petty Cash Fund

A minor sum of money maintained in reserve for completing instant transactions for various minor costs.

Journalize

Recording financial transactions in the appropriate book of accounts, ensuring they are officially documented.

Replenishment

The process of filling up or restocking inventory or supplies to maintain required levels.