Which of the following is a value judgment found in SFAC No. 1?
A)Accounting reports should become the only relevant source of information about enterprises.
B)Cash basis accounting is extremely useful in assessing and predicting earning power and cash flows of an enterprise.
C)Information is not costless to provide, so benefits of usage should exceed costs of production.
D)Users of accounting information have limited ability regarding financial information and reporting.

Question

Quizplus · Accepted Answer

Value judgments in accounting often involve weighing the benefits against the costs of providing information, as highlighted in choice C. SFAC No. 1 acknowledges that providing information incurs costs, and it is important that the benefits derived from the information outweigh these costs.

Which of the Following Is a Value Judgment Found in SFAC