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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Which characteristic states that accounting information should be supported by sufficient evidence to allow two or more qualified individuals to arrive at similar measures and conclusions?

  1. a. matching
  2. b. verifiability
  3. c. periodicity
  4. d. monetary unit

To determine

Identify the characteristic that states accounting information should be supported by sufficient evidence to allow two or more qualified individuals to arrive at similar measures and conclusions.

Explanation

Accounting Information:

Accounting information helps in measuring and communicating economic events in business. Accounting concepts and accounting information guides the enterprise in managing the business activities and helps in monitoring the method of invest the money and receiving money.

Justification for the incorrect answer:

Option a:

According to the matching principle, the expense should be recognized when it is actually incurred, doesn’t matter, payment is made or not. This principle ensures that the expenses incurred in the current period are matched against the revenues earned in the same period. Therefore, Option a is an incorrect answer.

Option c:

According to the periodicity assumption, the financial statements are prepared for a definite and particular period to analyze the financial performance on a timely basis...

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