Under SFAC No

question 8

Multiple Choice

Under SFAC No. 8, which of the following are aspects of relevance?

• A)Comparability and understandability
• B)Timeliness and comparability
• C)Representational faithfulness and decision usefulness
• D)Predictive value and confirmatory value

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Definitions:

Inventory

The term for goods and materials that a business holds for the ultimate goal of resale.

Trading Securities

Investments in debt or equity securities that are purchased with the intention of selling them in the short term to profit from price fluctuations.

Unrealized Loss

A loss that results from holding on to an asset that has decreased in price, but has not yet been sold or officially recorded in the financial statements.

Fair Value

The estimated market price of an asset or liability, considering factors like utility, demand, and supply conditions, to ensure an accurate valuation.