All of the Following Are Usually Seen as Valid Reasons

question 3

Multiple Choice

All of the following are usually seen as valid reasons for having different reporting standards for different business entities,except:

• A) information needs of users may be different for different entities
• B) costs of designing and installing an accounting information system may be different for different entities
• C) investors in smaller entities generally do not read financial reports
• D) users of the reports of some entities can obtain special purpose reports for their own use as required

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Definitions:

Cumulative Unrecognized

Accumulated amounts of certain expenses or revenues that have not yet been recognized in a company's financial statements.

Amortization

The process of gradually writing off the initial cost of an asset over a period, often used for intangible assets.

Corridor

A method used in pension accounting to amortize certain actuarial gains and losses over time.

Unrecognized Loss

A loss that has occurred but has not yet been reported in the financial statements because it has not been realized through a transaction.