Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 2 - A Further Look at Financial Statements - Brief Exercises: BE2-11

Answer

The correct choice is C

Work Step by Step

FASB fallows some key assumptions and while framing accounting standards. One of which is the full disclosure principle and others are monetary unit, economic entity period, going concern assumption and cost principle. Choice A is incorrect because cost principle that all assets be reported at their cost. Choice B is incorrect because monetary unit assumption requires the reporting of only those events that can be measured in dollars only. Choice D is incorrect because an unqualified opinion on the financial statements gives an assurance that these statements are prepared according to the various standards prescribed by the GAAP
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