Which of the following are constraints that allow a company to modify generally accepted accounting principles without jeopardizing the usefulness of the financial statements? Consistency and comparability Relevance and faithful representation Timeliness and neutrality Cost constraint

Question

Business

Mueller

20 July, 16:36

Which of the following are constraints that allow a company to modify generally accepted accounting principles without jeopardizing the usefulness of the financial statements? Consistency and comparability Relevance and faithful representation Timeliness and neutrality Cost constraint

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Rosa Henson · Answer 1

Cost constraint

Explanation:

It is the cost constraint which clearly defines the ability to meet the task concerned.

There are some certain standards to be met when when following the generally accepted accounting principles.

The statements shall follow:

Consistency in preparing accounts,

Comparability as both year financial records shall be presented adjacently.

True and fair results shall be presented.

Timeliness represents the accrual concept, and states all transactions shall be recording timely.

Therefore, the cost constraint is the only valid constraint else no constraint is valid.