Accounting records are designed to be kept on subjective rather than objective evidence.
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A. B.B
The statement "Accounting records are designed to be kept on subjective rather than objective evidence" is false.
Accounting records are intended to be kept based on objective evidence rather than subjective evidence. Objective evidence refers to verifiable data that can be observed, measured, or tested through independent means. Examples of objective evidence include bank statements, invoices, receipts, and purchase orders.
In contrast, subjective evidence is based on personal opinion, interpretation, or judgment, and is not verifiable through independent means. Examples of subjective evidence include personal notes, memos, and assumptions.
Keeping accounting records based on subjective evidence can result in unreliable financial statements and can make it easier for fraud to go undetected. The use of objective evidence ensures the accuracy, completeness, and transparency of financial records, making it easier for fraud examiners to detect irregularities and fraudulent activities.
Therefore, it is essential to keep accounting records based on objective evidence rather than subjective evidence.