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Questions and Answers
According to International Financial Reporting Standards, what is the primary objective of financial reporting?
According to International Financial Reporting Standards, what is the primary objective of financial reporting?
- To provide financial information that is useful to existing and potential investors, lenders and other creditors (correct)
- To help managers make decisions to manage the business
- To present financial statements for public consumption
- To prepare accounting information for people outside the organization
What are the fundamental qualitative characteristics that must be complied with when producing financial statements?
What are the fundamental qualitative characteristics that must be complied with when producing financial statements?
- Verifiability and Comparability
- Relevance and Faithful Representation (correct)
- Materiality and Consistency
- Predictive Value and Understandability
What does the principle of comparability imply in financial accounting?
What does the principle of comparability imply in financial accounting?
- Capacity of financial information to influence the decision of its users
- Uniform application of accounting methods across entities in the same industry (correct)
- The actual effects of transactions to be properly accounted for and reported
- Financial information must be presented to the users before a decision is to be made
