The conceptual framework of accounting helps to ensure that
A) a rule will be in place for every possible situation.
B) there are consistent standards prescribing the nature, functions and limits of financial statements.
C) all countries have their own unique accounting standards.
D) users with no accounting or business knowledge will understand financial statements.

Question

Quizplus · Accepted Answer

The conceptual framework of accounting provides consistent standards and guidelines for the preparation and presentation of financial statements. It allows for a uniform approach to be taken in accounting, ensuring that financial information is reliable and consistent across different companies, industries, and countries. It also helps to establish the nature, functions, and limits of financial statements, ensuring that users can rely on them to make informed decisions. The framework is not intended to provide a rule for every possible situation, nor is it unique to any one country. It is also not designed to make financial statements understandable to users with no accounting or business knowledge.

The Conceptual Framework of Accounting Helps to Ensure That