The Four Assumptions Financial Statement Users Should Be Able to Assume

question 15

Multiple Choice

The four assumptions financial statement users should be able to assume that preparers of the statements have made in preparing the statements that are listed by the FASB's conceptual framework are

• A) separate economic entity, going concern, monetary unit, and periodicity of income.
• B) conservatism, matching principle, revenue recognition principle, and periodicity of income.
• C) conservatism, cost-benefit test, full disclosure principal, and industry practice constraint.
• D) historical cost basis, materiality realization, and transparency.

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Definitions:

Successor

A person or entity that follows and takes over a position, role, or office from another, often in a planned and designated manner.

Groomed

Prepared or trained for a specific purpose, often with care and attention to detail.

Ready

Prepared or in a suitable state for an activity, action, or situation.

Developmental Assignments

Tasks or roles assigned to employees with the purpose of enhancing their knowledge, skills, and experiences for career advancement.