Question

Which of the following statements best describes the accounting principle of objective evidence?

1) it involves recording, classifying, and summarizing transactions in order to prepare reports
2) it requires supporting documents for accounting transactions whenever possible
3) it assumes that the business will survive for the foreseeable future
4) it requires that all events that would make a difference to the user of the financial report be accounted for

Answer 1

The accounting principle of objective evidence demands verifiable support, like documents, for recorded transactions in accounting.

Step-by-step explanation:

The accounting principle of objective evidence best aligns with the following statement: it requires supporting documents for accounting transactions whenever possible.

This principle emphasizes the importance of having verifiable proof, such as invoices, receipts, contracts, or bank statements, to support the entries made in accounting records.

This assures that all recorded transactions are based on reliable and unbiased information, enhancing the credibility of financial statements.

The accounting principle of objective evidence requires supporting documents for accounting transactions whenever possible.

This means that there should be physical evidence, such as receipts or invoices, to back up the recorded transactions. This helps ensure the accuracy and reliability of the financial reports.