Estimations Are Frequently Made in the Financial Statements in Relation

question 32

Multiple Choice

Estimations are frequently made in the financial statements in relation to items such as bad debts,inventory obsolescence,an asset's useful life and the expected pattern of consumption of economic benefits of depreciable assets.The effect of these estimations on the financial statements is to:

• A) increase the variability of profits.
• B) make the statement unreliable.
• C) reduce the relevance of the profit figures reported.
• D) None of the given answers are correct.

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