Which of the following are examples of judgments made in the accounting reporting process?
I. Useful life of machinery
II. Allowance for doubtful accounts
III. Obsolescence of assets
IV. Interest payment on bonds
A) I, II, III and IV
B) I, II and III
C) II and III
D) I and III

Question

Quizplus · Accepted Answer

Judgments made in the accounting reporting process include estimates of useful life of machinery, allowance for doubtful accounts, and obsolescence of assets. Interest payment on bonds, on the other hand, is a factual transaction that does not involve judgment. Therefore, the best choice is option B as it includes the three items that involve judgments.

Which of the Following Are Examples of Judgments Made in the Accounting