The Conceptual Framework of Accounting Should Have Many Positive Effects

question 47

Multiple Choice

The conceptual framework of accounting should have many positive effects as new accounting standards are developed. Which of the following is not one of those effects?

• A) Financial statements among companies and industries should be more consistent and comparable.
• B) Standard setting should be more consistent with an overall statement of the objectives and concepts of financial reporting.
• C) Users' understanding and confidence in financial statements should increase.
• D) Management should have greater latitude in choosing among accounting alternatives.
• E) Accountants should be better able to assess the validity of different accounting alternatives for similar and dissimilar transactions and events.

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Definitions:

Indirect Costs

Expenses not directly attributable to a specific product or service but necessary for the general operation of a business.

Deontological Theories

Ethical theories positing that the morality of an action depends on its adherence to rules or duties, regardless of the outcome.

Motives

The reasons or driving forces behind individuals' actions or decisions.

Social Accountability

The responsibility of an organization or individual to consider and report on the social impacts and ethical implications of its activities.