Current Financial Reporting Standards Assume That Users of Accounting Information

question 58

Multiple Choice

Current financial reporting standards assume that users of accounting information:

• A)have an expert's understanding of economic and financial events and conditions.
• B)have a reasonably informed knowledge of business.
• C)have widely differing levels of knowledge about business,and that financial reporting must meet these differing needs.
• D)have only minimal knowledge of business.

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Definitions:

Negotiable

Pertains to documents or instruments that are transferable from one person to another through endorsement or delivery, thereby allowing the holder to take title.

Nonnegotiable

A term describing instruments or securities that cannot be transferred or assigned to another party.

Duress

A condition in which a person performs an act as a result of violence, threat, or other pressure against the person.

Fraudulent Inducement

A legal claim based on a misrepresentation of fact that leads another to enter into a contract or transaction with detrimental reliance on that misrepresentation.