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Question

Which of the following statement is true?

Statement A: Financial statements are prepared on the basis of accounting principles.

Statement B: Any changes in the accounting principles or method will affect the utility of the financial statements.


A

statement A is true but not B

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B

statement B is true but not A

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C

Both statements A and B are true.

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D

Both statements A and B are false

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Solution

The correct option is B - Both statements A and B are true.

Both statements A and B are true. i.e
Financial statements are prepared on the basis of accounting principles.
Any changes in the accounting principles or method will affect the utility of the financial statements.


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