Which of the following statements about accounting concepts and the characteristics of financialinformation are correct? 1 The concept of accruals requires transactions to be reflected in the financial statements once the cash or its equivalent is received or paid. 2 Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements. 3 Based on faithful representation, it may sometimes be necessary to exclude material information from financial statements due to difficulties establishing an accurate figure.
A、1 only
B、1 and 2 only
C、2 only
D、2 and 3 only
A、1 only
B、1 and 2 only
C、2 only
D、2 and 3 only
【参考答案及解析】
Statement (2) only is correct. Information is material if its omission or misstatement couldinfluence the economic decisions of users taken on the basis of the financial statements. Statement 1 describes the opposite of the accruals concept. Statement 3 is also incorrect, faithful representation does not prevent estimates made.
Statement (2) only is correct. Information is material if its omission or misstatement couldinfluence the economic decisions of users taken on the basis of the financial statements. Statement 1 describes the opposite of the accruals concept. Statement 3 is also incorrect, faithful representation does not prevent estimates made.