Which of These Is Not One of the Ways AASB

question 16

Multiple Choice

Which of these is not one of the ways AASB 108 'Accounting Policies' deals with the choice of accounting methods?

• A) By establishing a hierarchy of authorities
• B) By specifying particular policies to be used in certain situations
• C) By specifying the qualitative characteristics that financial information should have
• D) None of the above, i.e., all are ways in which AASB 108 deals with the choice of accounting methods

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Definitions:

Vertical Analysis

An approach to financial statement examination whereby each component is presented relative to a foundational number in the report.

Balance Sheet

An accounting summary that captures a company's financial holdings, debts, and stockholders' equity at a given time.

Income Statement

A financial statement that shows a company's revenues, expenses, and profit over a specific period of time.

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (asset, liabilities, and equity) in a balance sheet is represented as a proportion of the total account.