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

question 28

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 comparability doctrine?

• A)I
• B)II
• C)III
• D)IV

---

Definitions:

Per Capita GDP

The measure of a country's economic output per person, calculated by dividing the Gross Domestic Product by the total population.

Upper Volta

The former name of the West African country now known as Burkina Faso, until it was renamed in 1984.

Lower Volta

A region in Ghana, characterized by the Volta River's lower part, significant for its hydroelectric projects and agriculture.

Aggregate Production

The total output of goods and services produced by an economy over a specific time period.