Accounting Estimate Nirvana Is ________

question 25

Multiple Choice

Accounting estimate nirvana is ________.

• A)the width of the reasonable range is greater than the material misstatement but not greater than two times the material misstatement,which means an estimate with no significant risk can be found within the reasonable range
• B)the width of the reasonable range is less than or equal to the material misstatement,which means that there is no significant risk for any estimates within the reasonable range
• C)the width of reasonable range is greater than or equal to the material misstatement,which means that there is no significant risk for any estimates within the reasonable range
• D)the width of reasonable range is less than the material misstatement but not greater than two times the material misstatement,which means an estimate with no significant risk can be found within the reasonable range

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Definitions:

Government Policies

Actions and principles that a government follows or implements to achieve certain goals in the country's social, economic, and foreign affairs.

Extra Profit

Additional earnings that exceed the normal expected profit from business activities.

Rent-Seeking Behavior

Actions by individuals or firms aimed at manipulating the political or economic environment to acquire unearned income or profits.

Principal-Agent Problem

A conflict in priorities between a person or group making decisions on behalf of others (agent) and those who are affected by those decisions (principal).