In reporting on its liability for long service leave to employees,a company is obliged to trade off:
A) understandability and consistency.
B) relevance and faithful representation.
C) materiality and disclosure.
D) comparability and relevance.

Question

Quizplus · Accepted Answer

When reporting on its liability for long service leave to employees, a company should give importance to both relevance and faithful representation. Relevant information is essential for the users to understand the financial position of the company. The information must also be represented faithfully so that it is reliable and shows a true picture of the company's situation. Other options such as consistency, disclosure, and comparability may not be as crucial in this particular situation.

In Reporting on Its Liability for Long Service Leave to Employees,a