Which of the Following Accounting Policies Is an Example of a Trade-Off

question 61

Multiple Choice

Which of the following accounting policies is an example of a trade-off between relevance and faithful representation?

• A) Research outflows are expensed and development activities expenses are capitalised.
• B) Biological assets are stated at fair value unless the fair value cannot be measured reliably.
• C) Machinery and equipment are reviewed periodically to assess propriety of useful life estimations used in depreciation.
• D) All of the given answers are correct.

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Definitions:

Confidence

The feeling or belief in one's abilities, qualities, or the reliability of something or someone.

Actual Value

The real, measured value of an object, property, or financial instrument, as opposed to its estimated or anticipated value.

Variable Allowances

Adjustments in time estimates or costs to accommodate changes in work conditions or processes.

Normal Time

The standard duration that a task or activity is expected to take under normal working conditions.