Question

Financial accounting information is characterized by all of the following except ___________.

• A. It is historical in nature
• B. It is factual, so it does not require judgement to prepare
• C. It results from appropriate measures
• D. It is enhanced by managements explanation

Answer 1

Answer: (B)

It is factual, so it does not require judgement to prepare

'Professional judgement' is required to prepare accounting information since it is based on various accounting assumptions, policies, principles and standards. Therefore, financial accounting information involves professional judgement which cannot be ignored and hence, the statement that the judgement is not required is not correct.