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MC Question 1
Faithful representation is a fundamental characteristic of useful information within the IASB’s Conceptual framework
for financial reporting.
Which of the following accounting treatments correctly applies the principle of faithful representation?
| A | Reporting a transaction based on its legal status rather than its economic substance |
|---|---|
| B | Excluding a subsidiary from consolidation because its activities are not compatible with those of the rest of the |
| C | Recording the whole of the net proceeds from the issue of a loan note which is potentially convertible to equity |
| D | Allocating part of the sales proceeds of a motor vehicle to interest received even though it was sold with 0% |