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NEW QUESTION 37
Which of the following statements are correct in the context of accounting concepts and principles?
I)The going concern assumption requires that assets be carried at their cost values.
II)Prudence allows the creation of contingency reserves and more generous provisions.
III)Financial information is considered complete even if it excludes non-material information.
IV)Understandability does not require complex information to be excluded from financial reports.
- A. I and III only
- B. III and IV only
- C. II and IV only
- D. II and III only
Answer: B
NEW QUESTION 38
Which one of these is a disadvantage of a conceptual framework?
- A. A single framework is not suitable for all users of financial statements.
- B. It replaces the established principles.
- C. It increases the chances of political interference in the development of accounting standards.
- D. It mandates the formats of various financial statements.
Answer: A
NEW QUESTION 39
LMN Ltd recently changed the measurement base for their assets. They should I)treat this like a change in an estimate.
II)treat this like a change in the accounting policy.
III)disclose this in the notes to financial statements.
- A. II and III only
- B. I and III only
- C. I only
- D. III only
Answer: A
NEW QUESTION 40
Which one of these concepts suggests that stock prices react to new information almost instantly?
- A. efficient market
- B. bargaining power
- C. incentive substitution
- D. market power
Answer: A
NEW QUESTION 41
Which one of the following is an accurate definition of fair value of an asset?
- A. The cost of replacing an asset with an identical item.
- B. The price for which an asset could be sold net of disposal costs.
- C. The amount yet to be written off over the remainder of the asset's useful life.
- D. The price for which an asset could be sold in an orderly transaction between market participants at the measurement date.
Answer: D
NEW QUESTION 42
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