An effective accounting system should identify and record only the valid transaction of the entity that occurred in the current period, which relates to the:
A) rights and obligations assertion.
B) presentation and disclosure assertion.
C) valuation or allocation assertion.
D) existence or occurrence assertion.
E) completeness assertion.

Question

Quizplus · Accepted Answer

The existence or occurrence assertion relates to whether the transactions recorded in the financial statements have actually occurred and pertain to the entity. An effective accounting system ensures that only valid transactions that have occurred within the current period are identified and recorded, aligning with the existence or occurrence assertion.

An Effective Accounting System Should Identify and Record Only the Valid