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Question
Accounting principles are necessary due to which of the following reasons?
Options
To identify and classify economic transactions for meaningful presentation.
To ensure uniformity in accounting records.
These principles represent a scientific approach to financial statements.
All of these
Solution
All of these
Explanation:
Accounting principles are necessary for several reasons:
- To identify and classify economic transactions for meaningful presentation: These principles help in the correct identification and classification of financial transactions, ensuring that they are recorded and presented in a way that provides meaningful and useful information.
- To ensure uniformity in accounting records: Accounting principles provide a standardized approach to recording and reporting financial information, ensuring consistency and comparability across different organizations and time periods.
- These principles represent a scientific approach to financial statements: Accounting principles are based on established guidelines and methodologies, which provide a systematic and logical framework for preparing financial statements.
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