When We Fall into the Trap of Believing That Terms

question 19

Multiple Choice

When we fall into the trap of believing that terms have real meanings we are guilty of:

• A)reification.
• B)measurements that lack reliability.
• C)measurements that lack validity.
• D)confusing reliability with validity.
• E)confusing validity with reliability.

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Definitions:

Appropriately Recognized

Pertains to the correct recording of financial transactions and elements in accordance with accounting standards and principles.

Critical Event

A significant occurrence or moment that has the potential to impact the course or outcome of a process or situation dramatically.

Generally Accepted Accounting Principles (GAAP)

A collection of commonly-followed accounting rules and standards for financial reporting within the United States.

Reported Profit

The profit figure announced by a company, typically found in its financial statements, after accounting for all expenses.