A Persuasive Constraint That Ensures the Value of the Information

question 82

Multiple Choice

A persuasive constraint that ensures the value of the information provided is greater than the costs of providing it is the

• A) financial reporting objective constraint.
• B) cost constraint.
• C) going concern constraint.
• D) economic entity constraint.

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Definitions:

Expected Income

The amount of money an individual or entity anticipates earning over a certain period.

Probability

The measure of the likelihood that a particular event will occur, often expressed as a number between 0 and 1.

Insurance Market

A marketplace where individuals and entities can purchase insurance products to transfer risk and receive financial protection against loss.

Asymmetric Information

A situation in which one party in a transaction has more or better information than the other party, often leading to an imbalance in a transaction.