One of the Advantages of Principles-Based Standard Is

question 16

Multiple Choice

One of the advantages of principles-based standard is:

• A)They do not improve representational faithfulness of financial statements.
• B)They allow for no professional judgement.
• C)They are generally simpler.
• D)None of the above.

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Definitions:

Income Statement

A report showing the earnings, expenses, and net income of a business during a particular period, reflecting its financial performance.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in discounting to assess investment value.

Semiannual Interest

Interest that is calculated and paid twice a year, often associated with bonds or loans.

Effective Rate

The actual interest rate that a borrower pays or earns, taking into account the compounding of interest.