A Study by the SEC Notes That Imperfections Exist When

question 3

Multiple Choice

A study by the SEC notes that imperfections exist when standards are established on either a rules-based or a principles-based basis only. The SEC recommends that standards should have all of the following characteristics except:

• A) Enumerate exceptions from the standard.
• B) Provide sufficient detail and structure so that the standard can be operationalized and applied on a consistent basis.
• C) Avoid use of bright lines that allow structuring of financial transactions to achieve technical compliance while evading the intent of the standard.
• D) Be based on a consistently applied conceptual framework.

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Definitions:

Balanced Equation

A chemical equation where the number of atoms for each element, and the total charge, are the same on both the reactants and products sides.

Fe2O3

Iron(III) oxide, a reddish-brown solid also known as rust, used in various applications such as painting and in the synthesis of iron.

Balanced Equation

A chemical equation where the number of atoms for each element, and thus the total charge, is the same on both the reactants' and the products' sides.

CH4O

CH4O represents the chemical formula for methanol, a simple alcohol used as a solvent, fuel, and antifreeze.