The Conceptual Framework States That an Important Implication of the Qualitative

question 35

Multiple Choice

The Conceptual Framework states that an important implication of the qualitative characteristic of comparability is that:

• A) it will allow different users of the information to come to a consensus.
• B) it will be used to predict outcomes of past, present or future events.
• C) users will be informed of the accounting policies used in the preparation of the financial reports, plus any changes to those policies and the effects of those changes.
• D) if there is a choice of accounting methods one method should be chosen and then applied throughout the life of the entity.

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Definitions:

Policy

In insurance law, a contract for insurance coverage. The policy spells out the precise terms and conditions as to what will and will not be covered under the contract.

Potential Loss

The possibility of experiencing a negative outcome, often calculated in terms of financial impact.

Risk

A prediction concerning potential loss based on known and unknown factors.

Hazard

A potential source of harm or adverse health effect on a person or persons.