Multiple choice

Which accounting principle is used to ensure that financial statements give a complete, relevant and accurate picture of transactions and events?

  1. Principle of full disclosure

  2. Principle of consistency

  3. Principle of materiality

  4. Principle of substance over form
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

When an entity practice the substance over form, it means that the financial statements reflect the financial reality of the entity (Substance) rather than the legal form of the transactions and events (forms), which underlie them.

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