Which statement is correct?
A)Supplier discounts can only be accounted for by using the gross method.
B)The amount owing for trade payables is generally not known with a high degree of certainty.
C)An accrued liability is needed when a company has received goods,but not the invoice.
D)Completeness means that obligations are reported in the proper accounting period.

Question

Quizplus · Accepted Answer

An accrued liability is needed when a company has received goods but not the invoice. This allows for the proper matching of expenses with revenue in the correct accounting period. The other statements are incorrect. Supplier discounts can be accounted for using either the gross method or the net method. The amount owing for trade payables can be known with a high degree of certainty if proper record-keeping and reconciliation processes are in place. Completeness means that all obligations and transactions are recorded and disclosed in the financial statements in the proper accounting period.

Which Statement Is Correct