Accounting estimate nirvana is ________.
A)the width of the reasonable range is greater than the material misstatement but not greater than two times the material misstatement,which means an estimate with no significant risk can be found within the reasonable range
B)the width of the reasonable range is less than or equal to the material misstatement,which means that there is no significant risk for any estimates within the reasonable range
C)the width of reasonable range is greater than or equal to the material misstatement,which means that there is no significant risk for any estimates within the reasonable range
D)the width of reasonable range is less than the material misstatement but not greater than two times the material misstatement,which means an estimate with no significant risk can be found within the reasonable range

Question

Quizplus · Accepted Answer

Accounting estimate nirvana is achieved when the width of the reasonable range is less than or equal to the material misstatement, which means that there is no significant risk for any estimates within the reasonable range. This indicates that the estimate is highly reliable and accurate. Option B states the same, hence it is the correct choice. Option A and D state that an estimate with no significant risk can be found within the reasonable range, but the width of the reasonable range is greater than the material misstatement, which means there is still a level of uncertainty involved. Option C states that the width of the reasonable range is greater than or equal to the material misstatement, which signifies that there may be significant risks associated with the estimate. Therefore, option B is the best choice.

Accounting Estimate Nirvana Is ________