The SEC's 2003 report to the Congress on "principles-based" accounting observed that the first characteristic of objectives-based standards, dictated by the Sarbanes-Oxley Act, is that any standard must be based on the cost-benefit test. e transparency qualitative characteristics. an improved and consistently applied framework. Question 2 The Purchases account is O a temporary account. O a permanent account. O a subsidiary account. a liability account. Question 3 The Sales account is classified as a contra account. O a liability account a revenue account. an asset account. The four assumptions financial statement users should be able to assume that preparers of the statements have made in preparing the statements that are listed by the FASB's conceptual framework are O conservatism, cost-benefit test, full disclosure principal, and industry practice constraint. O conservatism, matching principle, revenue recognition principle, and periodicity of income. historical cost basis, materiality realization, and transparency. separate economic entity, going concern, monetary unit, and periodicity of income. In order to ensure that they are meaningful and useful, financial statements should be prepared on a daily basis. using generally accepting accounting principles (GAAP). O on a timely basis. in accordance with section 108 of the Sarbanes-Oxley Act