An effective accounting system should measure the value of transactions in a manner that permits recording their proper monetary value in the financial statements, 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 valuation or allocation assertion is concerned with whether assets, liabilities, revenues, and expenses have been included in the financial statements at appropriate amounts and any resulting valuation or allocation adjustments are appropriately recorded. This assertion directly relates to measuring the value of transactions to ensure their proper monetary value is reflected in the financial statements.

An Effective Accounting System Should Measure the Value of Transactions