Which of the Following Statements Is Correct in Relation to the Assumptions

question 8

Multiple Choice

Which of the following statements is correct in relation to the assumptions to be made when preparing financial reports?

• A)There is one underlying assumption which is that financial reports are prepared on a going concern basis.
• B)The Conceptual Framework requires that several assumptions be made when preparing financial reports.
• C)There are no assumptions to be made when preparing financial reports.
• D)There is an assumption that more information is better than less.

---

Definitions:

Product Output Stakeholders

Individuals or groups who are directly affected by the production and outcome of a product, including consumers, employees, investors, and suppliers.

Value Creation

What occurs when the result of a work task or activity makes a product or service worth more in terms of potential customer appeal than at the start.

Sustainable Business

A business approach that focuses on meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Natural Environment

All living and non-living things occurring naturally, such as land, water, air, plants, and animals, which are essential for human survival and economic activity.