Asked by Collin Shaffer on Jul 17, 2024
Verified
The degree to which the accounting actually represents the underlying economic events is faithful representation.
Faithful Representation
A fundamental qualitative characteristic in accounting that ensures financial information accurately reflects an entity's transactions and events in a way that is complete, neutral, and free from error.
Economic Events
Actions or occurrences that have a direct economic impact on the financial position of a business, influencing its assets, liabilities, and equity.
- Understand the concept of faithful representation in accounting.
Verified Answer
NS
Nur Sarah Hanisya Mohd HarmiziJul 18, 2024
Final Answer :
True
Explanation :
Faithful representation is one of the fundamental qualitative characteristics of financial reporting. It means that the accounting information provided should be complete, accurate, and free from error, and represent the economic substance of a transaction rather than just its legal form. In other words, the financial statements should provide a true and accurate picture of an entity's financial position, performance, and cash flows.
Learning Objectives
- Understand the concept of faithful representation in accounting.