Activity 1.1.1 Name two (2) types of non-reporting entities. For each type of non-reporting entity, describetheir key characteristics.Type of non-reporting entityKey characteristics1.2 What are the differences between non-reporting entities and reporting entities when it comes tofinancial reporting?1.3 What is the purpose of preparing financial statements for non-reporting entities?

1.1 Types of Non-Reporting Entities and Key CharacteristicsSmall Private Companies:These are…

Answered: Activity 1. 1.1 Name two (2) types of…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter2: Financial Reporting: Its Conceptual Framework

Section: Chapter Questions

Problem 5MC

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What is the qualitative characteristic of financial statements according to the Framework? a. Qualitative characteristics are broad classes of financial effects of transactions and other events b. Qualitative characteristics are the attributes that make the information provided in financial statements useful to others c. Qualitative characteristics measure the extent to which an entity has complied with all relevant standards. d. Qualitative characteristics are non-quantitative aspects of an entity’s position and performance and changes in financial position.
A recognition test assists with deciding whether items should be included in the financial statements. Which characteristic of a financial statement does this refer to? O A. Reliable O B. Complete OC. Material O D. Neutral Type here to search
Which of the following is not an objective of the conceptual framework? O a. Provides guidance for transactions not addressed in existing accounting standards O b. Enables implementation of one universal set of accounting standards O c. Enables consistency of qualitative characteristics in financial reports O d. Addresses the common needs of users of financial reports
Question 12 What is the objective of financial reporting? Answers: Provide information that clearly portrays nonfinancial transactions. Provide information that excludes claims to the resources. Provide information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors. Provide information that is useful to management in making decisions.
Who enforces requirements regarding financial products and services? A. CCA B. ACCC C. ASIC D. ACL
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Which of the following is considered a constraint on useful information by Statement of Financial Accounting Concepts No. 8? a. benefits costs b. conservatism c. timeliness d. verifiability
That a business may only report activities on financial statements that are specifically related to company operations, not those activities that affect the owner personally, is known as which of the following? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumption
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The Conceptual Framework The IASB's Framework for the preparation and presentation of financial statements, sets out the concepts that underlie the preparation and presentation of financial statements that external users are likely to rely on when making economic decisions about an entity. In addition the Framework sets out the recognition criteria for assets and liabilities, which is of particular importance. Required: a. Explain the purpose of the Framework b. Define assets and liabilities and explain the important aspects of their definitions. Explain why these definitions are of particular importance for the preparation of an entity's statement of financial position and income statement.
The objective of general-purpose financial reporting is? to provide users with financial information that implies total freedom from error to provide companies with the option to select information that favors one set of interested parties over another O to provide financial information about the reporting entity that is useful to present and potential equity investors, lender and other creditors in making decisions in their capacity as capital providers to provide a metric for financial information used to determine when the boundary between two or more entities should disregarded and the entities considered to be a licensing arrangement
For which classification of users are financial statements prepared? What characteristic of these users makes the development of generally accepted accounting principles necessary?

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