Which Statement Best Explains the Meaning of "Presentation" in Financial

question 49

Multiple Choice

Which statement best explains the meaning of "presentation" in financial reporting?

• A)Determining where items should be presented in the body of the financial statements.
• B)Presenting an item in the body of the financial statements and in the notes.
• C)Quantifying items so that they can be presented in the body of the financial statements.
• D)Presenting expenses in the same accounting period as the related revenues.

---

Definitions:

Negative Externality

A cost experienced by a third party not involved in the economic transaction, such as pollution affecting residents near a factory.

Spillover Cost

A cost incurred by someone who did not choose to incur that cost.

Allocative Efficiency

A state of the market where resources are allocated in a way that maximizes the net benefit to society.

Productive Efficiency

Productive efficiency occurs when an economy is operating at its maximum capacity, producing goods and services at the lowest possible cost per unit.