For an Entity's Financial Statements to Be Presented Fairly in Conformity

question 67

Multiple Choice

For an entity's financial statements to be presented fairly in conformity with generally accepted accounting principles, the principles selected should:

• A) Be applied on a basis consistent with those followed in the prior year.
• B) Be approved by the Auditing Standards Board or the appropriate industry subcommittee.
• C) Reflect transactions in a manner that presents the financial statements within a range of acceptable limits.
• D) Match the principles used by most other entities within the entity's particular industry.

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Definitions:

Environmental Pressures

External forces in the environment that can affect the survival and development of an organism or organization.

Stability

The quality of being resistant to change and capable of maintaining a constant condition.

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by a dismissive or derogatory view towards other cultures.

Sociological Perspective

An approach to understanding human behavior by placing it within its broader social context, examining how societies influence individuals and groups.