Disadvantage of Principles-Based Standards Is

question 8

Multiple Choice

Disadvantage of principles-based standards is:

• A) They allow mangers to select policies that may not reflect the substance of a transaction
• B) They allow accountants to use professional judgement
• C) They supply broad guidelines
• D) All of the above

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Definitions:

Microeconomics

Study of small economic units, such as individual consumers, families, and businesses.

Overhead Costs

These are ongoing expenses not directly attributed to creating a product or service but necessary for running a business, such as rent, utilities, and salaries.

Social Costs

Refers to the negative externalities that arise from economic activities, impacting society or the environment, not accounted for by the market.

Macroeconomics

Study of a nation’s overall economic issues, such as how an economy maintains and allocates resources and how a government’s policies affect the standards of living of its citizens.