Question

To present fairly in conformity with generally accepted accounting principles, the financial statements must:_______.

A. Inform users of all matters that could materially affect a decision.
B. Reflect transactions and events within a range of reasonable limits.
C. Be considered preferable to the users of those financial statements.
D. Be consistently applied.

Answer 1

B. Reflect transactions and events within a range of reasonable limits.

Step-by-step explanation:

When preparing statements in compliance with generally naccepted accounting principles, the emphasis is not wether all the information provided is 100% accurate. Rather it expects representation of transactions within a range of reasonable limits.

That is are the presented information in compliance with various generally accepted practices such as periodicity, full disclosure, consistency of method used in reporting, and so on.

Statements that meet reasonable range of limits is considered to present fairly in conformity with generally accepted accounting practices.