A user's main demand is for credible periodic reporting of an enterprise's financial position and performance.Credible means:
A) 100 per cent 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

Credibility means that the financial statements are sufficiently trustworthy and competently prepared for it to be used to make decisions. While accuracy is important, it is not always feasible to achieve 100% accuracy in financial reporting due to estimation and measurement uncertainties. The financial statements must also be relevant to the needs of decision-makers and easily understandable, but these factors do not necessarily ensure credibility on their own.

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