Question

Which of the following allows a company to modify generally accepted accounting principles without jeopardizing the usefulness of the financial statements?

A) Timeliness and neutrality
B) Relevance and faithful representation
C) Consistency and comparability
D) Cost constraint

Answer 1

The cost constraint allows a company to modify generally accepted accounting principles without jeopardizing the usefulness of the financial statements.

Step-by-step explanation:

The correct answer is D) Cost constraint. The cost constraint allows a company to modify generally accepted accounting principles without jeopardizing the usefulness of the financial statements. Generally accepted accounting principles (GAAP) are a set of guidelines and standards that companies follow when preparing their financial statements. However, companies may modify these principles if the cost of compliance outweighs the benefit of providing the information. This ensures that financial reporting is both accurate and cost-effective.