Multiple choice

All of the following are limitations of Accounting Standards except

  1. the choice between different alternative accounting treatments is difficult

  2. there may be trend towards rigidity

  3. Accounting Standards cannot override the statute

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The question asks for the exception (what is NOT a limitation). Let's examine each: (A) The choice between different alternative accounting treatments IS a limitation - it creates inconsistency and comparability issues, (B) Trend towards rigidity IS a limitation - it reduces flexibility and may not suit all businesses, (C) Accounting Standards CANNOT override the statute IS a limitation - this means laws take precedence over standards, limiting their authority. Since A, B, and C ARE all limitations of Accounting Standards, the answer is D (all of the above) - meaning all the listed items are limitations, so none of them is an exception.

Keep practicing — related questions