Relevance Is an Objective of External Financial Reporting That Means

question 104

Multiple Choice

Relevance is an objective of external financial reporting that means:

• A)the financial reports of a business are assumed to include the results of only that business's activities.
• B)financial information can be compared across businesses because similar accounting methods have been applied.
• C)the financial information possesses a feature that allows it to influence a decision.
• D)the financial information depicts the economic substance of business activities.

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Definitions:

Ms. Magazine

A feminist publication founded in the 1970s focused on women's issues, rights, and advocacy.

Compromise Provision

A clause in a legal or financial agreement that allows for a change in terms under specific circumstances.

Small NFPOs

Not-for-profit organizations that are relatively small in scale, size, or financial activity.

Revenue Recognized

The process of recording income when it is earned and realized or realizable, according to the principles of accounting.