Under Statement of Financial Accounting Concepts No

question 20

Multiple Choice

Under Statement of Financial Accounting Concepts No.2,the ability through consensus of measures to ensure that information represents what it purports to represent is an example of the concept of

• A)Relevance
• B)Verifiability
• C)Representational faithfulness
• D)Feedback value

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Definitions:

Earnings Surprise

When a company's actual reported financial results deviate from the expected figures, leading to an unexpected increase or decrease in its stock price.

Future Earnings

The projected income a company is expected to earn at a future date.

Incorrect Estimates

Errors or inaccuracies in predicting financial outcomes or assumptions, which can impact the financial statements and decision-making.

Fair Value

An estimate of the market value of a property, financial asset, or liability, based on current market prices or valuations.