A user's main demand is for credible periodic reporting of an enterprise's financial position and performance.Credible means:
A) 100% accurate
B) easily understandable by users of financial statements
C) sufficiently trustworthy and competently prepared for it to be used to make decisions
D) relevant to the needs of decision-makers.

Question

Quizplus · Accepted Answer

Credible reporting means that the financial statements are sufficiently trustworthy and competently prepared for them to be used to make informed decisions. While accuracy is important, it is not always possible to report 100% accurate financial information due to estimation and judgment required in accounting. Similarly, while understandable financial statements are important, they do not guarantee credibility. Finally, while relevance is important in financial reporting, it is not as essential as credibility when it comes to decision-making.

A User's Main Demand Is for Credible Periodic Reporting of an Enterprise's