Representational Faithfulness Includes

question 9

Multiple Choice

Representational faithfulness includes

• A) completeness, neutrality, and comparability.
• B) neutrality, completeness, and understandability.
• C) relevance, completeness, and freedom from material error.
• D) neutrality, completeness, and freedom from material error.

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Definitions:

Allowance for Doubtful Accounts

An account that offsets assets, designed to predict the amount of a company’s accounts receivable that is likely to be uncollectible.

Normal Balance

The side (debit or credit) of an account that is positive or increasing in nature, depending on the type of account.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Uncollectibles

Financial term referring to debts or receivables that are deemed unlikely to be collected and thus written off.