If Accounting Information Is Considered to Have Faithful Representation,then Which

question 161

Multiple Choice

If accounting information is considered to have faithful representation,then which of the following is true?

• A)The information represents to users what it claims to represent.
• B)The information follows conservatism principles and is also material.
• C)The information is considered pertinent to or affects decisions.
• D)The information will have predictive value,feedback value,and is timely.

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Definitions:

Unlimited Liability

The potential for an owner to lose more than has been invested in a business.

Double Taxation

A situation in which the same income is taxed twice; this often occurs with corporate income taxes where earnings are taxed at the corporate level and again when distributed as dividends to shareholders.

Start-Up Investment

Start-up investment refers to the initial capital required to start a new business, including costs for product development, market research, and operational expenses.

Sole Proprietorship

A business structure in which a single individual owns and operates the business, bearing sole responsibility for its debts and liabilities.