Accounting Standards: Purpose and Importance
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Questions and Answers

What does an accounting standard primarily provide?

  • Guidelines for ethical behavior in accounting
  • Requirements for financial reporting (correct)
  • Rules for employee payroll management
  • Strategies for marketing accounting services
  • Why is it important for companies to adhere to accounting standards?

  • To reduce competition in the market
  • To attract more investors (correct)
  • To increase employee salaries
  • To minimize tax payments
  • What is the main purpose of establishing accounting standards?

  • To promote aggressive financial practices
  • To create complex financial statements
  • To provide consistency and comparability in financial reporting (correct)
  • To limit the information available to stakeholders
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