The correct answer is D. All of the above.
Accounting standards are a set of rules that companies must follow when preparing their financial statements. They are designed to ensure that financial statements are accurate and comparable across companies. Accounting standards codify the generally accepted accounting principles (GAAP), which are the basic principles that accountants follow when preparing financial statements. Accounting standards also lay down the norms of accounting policies and practices by way of codes or guidelines. The main purpose of accounting standards is to provide information to the user on the basis of which the accounts have been prepared.
Here is a brief explanation of each option:
- Option A: Accounting standards codify the generally accepted accounting principles. This means that accounting standards are based on the GAAP, which are the basic principles that accountants follow when preparing financial statements.
- Option B: Accounting standards lay down the norms of accounting policies and practices by way of codes or guidelines. This means that accounting standards set out the rules that companies must follow when preparing their financial statements.
- Option C: The main purpose of accounting standards is to provide information to the user on the basis of which the accounts have been prepared. This means that accounting standards are designed to ensure that financial statements are accurate and comparable across companies.
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