Which One of the Following Is an Assumption Made in the Preparation

question 180

Multiple Choice

Which one of the following is an assumption made in the preparation of financial statements?

• A)Financial statements are prepared for a specific entity that is distinct from the entity owners.
• B)Financial statements are prepared assuming that inflation has a distinct effect on the monetary unit
• C)Preparation of financial statements for a specific time period assumes that the balance sheet covers a period of time.
• D)Market values are always assumed to be irrelevant when preparing financial statements.

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Definitions:

Antilapse Clause

In an insurance policy, a clause which states that the insured has a grace period in which to make an overdue payment.

Appraisal

An expert estimation of the value of property, typically real estate, art, or jewelry, often for the purpose of taxation, sale, or insurance.

Arbitration Clauses

Arbitration clauses are provisions in a contract that require the parties to resolve disputes through arbitration rather than through litigation in court.

Federal Law

Laws created and enforced by the federal government of a country, as opposed to state, local, or international laws.