CSEET · Fundamentals of Accounting · Basic Concepts and Principles of Accounting
Which one of the following statements about the Framework for the Preparation and Presentation of Financial Statements (ICAI) is correct?
The correct statement is that applying the principal qualitative characteristics and appropriate accounting standards normally results in financial statements conveying a true and fair view. The Framework does not deal directly with that concept, and it applies to a range of accounting models.
- AApplying the principal qualitative characteristics and appropriate accounting standards normally results in statements conveying a true and fair viewCorrect
- BThe Framework overrides an Accounting Standard where the two conflict
- CThe Framework directly defines the true and fair view in detail
- DThe Framework permits only the historical cost accounting model
Explanation
The Framework states that the application of the principal qualitative characteristics and of appropriate accounting standards normally results in a true and fair view, although it does not deal directly with that concept. It is applicable to a range of accounting models, so the claim of only historical cost is wrong. It does not define true and fair view directly.
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