Which of the following is true with regards to judgement and flexibility in selecting accounting methods and applying accounting standards?
A) Flexibility makes it difficult if not impossible to prepare financial statements that allow users to compare the results of operations of similar companies in the same industry.
B) Accounting standards allow very little flexibility in the choice of methods as accounting rules tend to be strict and clear minimizing the opportunity for management judgement.
C) Flexibility in the selection of methods and application of accounting standards allows management to best reflect the economic realities of a company.
D) Financial statement information is not enhanced by allowing flexibility in the choice of accounting methods used.

Question

Quizplus · Accepted Answer

Flexibility in accounting methods allows management to choose the most appropriate methods to reflect the company's economic realities, which can provide more relevant and useful information to users.

Which of the Following Is True with Regards to Judgement