Final answer:
It is true that financial statement information that reflects the economic substance of a transaction is considered to be representationally faithful.
Step-by-step explanation:
Financial statement information that reflects the economic substance of a transaction is indeed considered to be representationally faithful. This means that the financial information accurately depicts the transactions or events that have occurred. In accounting, representational faithfulness is a cornerstone of high-quality financial reporting and ensures that the statements provide reliable, transparent, and useful information to users of the statements, such as investors, creditors, and others who may decisions based on the information provided.
Truth in financial reporting is anchored in the notion that the reported figures and narratives correspond with the actual economic events they purport to represent. This correspondence theory of truth maintains that a statement is true if and only if it accurately mirrors the facts or state of affairs in the world. Consequently, when financial statements are said to be representationally faithful, it indicates that they contain a property of truth consistent with the related group of transactions they represent.