The objectivity concept requires that

• A. the Financial Accounting Standards Board be fair and unbiased in its deliberations over new accounting standards
• B. accounting principles meet the objectives of the Security and Exchange Commission
• C. amounts recorded in the financial statements be based on independently verifiable evidence
• D. business transactions be consistent with the objectives of the entity

Answer: (C)

Objectivity in accounting means that the numbers in financial statements are based on evidence that can be independently verified by others, not on personal opinions or biases. This is why the statement that amounts recorded are based on independently verifiable evidence best captures the idea. Using verifiable data—like receipts, invoices, market prices, or audit confirmations—helps ensure reported amounts are credible and not influenced by subjective judgement. The other options miss the core point: fairness or unbiased deliberations by the standard-setter relate to process, not measurement; meeting the SEC’s objectives targets regulatory goals rather than how numbers are determined; and aligning transactions with the entity’s objectives concerns policy or purpose, not the verifiability of the recorded amounts.