The Following Are Quotations That Concern a Company's Accounting Policies $\quad$

question 14

Multiple Choice

The following are quotations that concern a company's accounting policies.
I. $\quad$ 'I think this item will change the judgement of one or two people but not the judgement of a reasonable person.'
II. $\quad$ 'Different firms must disclose their accounting policies and methods because that makes the financial reports of those firms more useful to report users.'
III. $\quad$ 'When estimating the useful life of a piece of equipment one should use some caution in the estimation because of uncertainties that exist.'
IV. $\quad$ 'Under a contract of sale, one entity sold an asset to another entity and made a loss on sale.However, the vendor entity retained use of the asset and enjoys the benefits of ownership of the asset.'
-Which one of the statements refers mainly to the notion of substance over form?

• A)I
• B)II
• C)III
• D)IV

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Definitions:

Asbestos

A group of naturally occurring fibrous minerals used in building materials and products, known to cause respiratory health issues.

Arsenic

A toxic element found naturally in the environment, known for its poisonous properties when ingested in high amounts.

Bilirubin

A yellow pigment that is produced by the breakdown of red blood cells in the liver and is a component of bile.

Yellow-Orange Skin

A skin color change that can indicate conditions like jaundice or carotenemia.