Which of the Following Is Not a Key Point of the Framework

question 27

Multiple Choice

Which of the following is not a key point of the Framework?

• A) Relevance and faithful representation are the primary qualitative characteristics that financial information should possess.
• B) Consistency should not be an end in itself.
• C) The concept of prudence should always take precedence over reliability.
• D) Financial information may lose its relevance if there is undue delay in reporting it.

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Definitions:

Market Price

The price in the marketplace at which an asset or service can currently be bought or sold.

Stock Outstanding

The aggregate amount of a corporation's stock currently possessed by all its shareholders, encompassing blocks of shares owned by institutional investors and shares that are subject to restrictions.

Shares Issued

The total number of shares that a corporation has legally distributed to shareholders, which may include shares held by the public as well as restricted shares owned by the company's insiders.

Red Herring

A preliminary prospectus filed by a company with the Securities and Exchange Commission (SEC), usually in connection with the company's initial public offering.