Which statement defines the objectivity principle?

• A. Transactions be recorded based on management's judgment
• B. Transactions be recorded using verifiable objective evidence
• C. Transactions be recorded only when audited
• D. Transactions be recorded with exact valuations for all assets

Answer: (B)

Objectivity means records should be based on verifiable, neutral evidence rather than personal judgments. This ensures information is reliable and comparable. The best way to meet this principle is to record transactions using objective evidence such as receipts, invoices, bank statements, or third‑party confirmations. Relying on documents that others can check reduces bias and provides a solid basis for the numbers. The other ideas involve subjectivity, a requirement for audits, or exact valuations that aren’t always possible, which don’t align with objectivity.