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Discuss why no estimates or subjectivity is allowed in the preparation of financial statements.

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Please help with the following problem. Provide at least 300 words.

Discuss why no estimates or subjectivity is allowed in the preparation of financial statements.

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The answer to your above posted question is provided in a separate word file in a descriptive or essay form discussing the points raised by you. The explanation is given in 390 words.

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Problem: Discuss why no estimates or subjectivity is allowed in the preparation of financial statements.

Solution:
Financial statements are pieces of papers and numbers written on them. But it is also important to note that they are not to be viewed as mere statistical objects but we should consider the real assets which are represented by the numbers in financial statements. Users of financial statements want reliable and accurate information. The accounting profession has therefore developed certain principles and guidelines. They are collectively termed as conceptual frame work. Information is reliable if it is verifiable. It should represent facts ...

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