Answered: The concept of capital maintenance…

The concept of capital maintenance chosen by an entity shall determine the accounting model used in the preparation of its financial statements. TRUE OR FALSE

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 26GI

See similar textbooks

Related questions

Q: What is the purpose of pro forma financial statements

A: Pro forma financial statements are financial reports issued by an entity, using assumptions or…

Q: IFRS requires companies to measure their financial assets at fair value except when based on:(a)…

A: International Financial Reporting Standards: IFRS (International Financial Reporting Standards) is…

Q: The principal difference between two concepts of capital maintenance is the treatment of the effects…

A: CAPITAL: Capital refers to the assets used for the production of goods and services. A typical…

Q: identify the statement that accurately describes why a transaction should be treated as a capital…

A: To deal with a transaction as a capital expenditure in preference to an fee, it need to meet…

Q: Explain the following measurement bases of the elements of financial statements and indicate how…

A: Financial statements are prepared by businesses to estimate the true and fair view of the financial…

Q: Describe the concept of conservatism in accounting and its implications on financial reporting. How…

A: The concept of conservatism in accounting refers to the practice of exercising caution and prudence…

Q: In accordance to MFRS 101, Presentation of Financial Statements, describe presentation requirements…

A: The Malaysian Financial Reporting Standards (MFRS) 101, "Presentation of Financial Statements," sets…

Q: purpose of recognizing depreciation on the financial statements? Is it designed to report PPE at…

A: Property, plant, and equipment (PPE) are long-term assets that are crucial to business operations.…

Q: Explain the concept of conservatism in accounting and how it influences the recognition and…

A: The concept of conservatism in accounting refers to the principle of being cautious and prudent in…

Q: Describe characteristics of special-purpose entities and identify the required financial statements…

A: A special-purpose entity is also referred to as a special-purpose vehicle, which is defined as a…

Q: In what ways does revenue recognition differ from other financial accounting procedures?

A: Definition: Every corporate entity should record revenues when they are generated, regardless of…

Q: How does the concept of fair value accounting influence the valuation of assets and liabilities on a…

A: Fair value accounting is a financial reporting approach where companies measure and report their…

Q: Explain the difference between capital expenditure and revenue expenditure, and how each type of…

A: Capital expenditure is an expense which is made to purchase an asset or to increase the capacity of…

Q: by The financial performance of an entity is calculated Select one: A. a decrease in expenditure. B.…

A: The financial performance of the company is the overall standing of the company in the categories of…

Q: When are financial statements considered authorized for issue?

A: The monetary record date is the urgent date at which the monetary situation of a substance is…

Q: Accounting estimates are those adopted by an entity in preparing and presenting its financial…

A: Explanation: Accounting estimates is a approximate amount that is used for measurement when there is…

Q: Define what are consolidated financial statements and their usefulness.

A: Financial statements - Financial statements are referred to as those records which are in written…

Q: Discuss the role of accounting theory in determining the appropriate measurement and valuation…

A: Accounting theory plays a crucial role in determining the appropriate measurement and valuation…

Q: What is the name of the accounting concept or principle that determines the amount initially entered…

A: Accounting for an entity is generally governed by various accounting concept that are generally…

Q: following heads in the accounti

A: Accounting principle follows the double entry system of recording transactions. To reconcile the…

Q: Outline the recognition criteria for the following elements of financial statements:

A: Assets are measured by accumulation of equity and liabilities. Some eg are, land, property, cash…

Q: ALM (Asset Liability Management) is particularly critical for: Group of answer choices B. Trust…

A: ALM (Asset Liability Management) commonly used for managing the finacial risk.

Q: Explain the accounting equation while considering the relationship between asset, liabilities and…

A: Accounting equation of accounting says that after every business transaction total of assets should…

Q: What is a financial assets held for trading?It is measurement still applicable? explain

A: Meaning of Financial assets held for trading: A financial asset is held for trading if the entity…

Q: In the statement of financial position, investment of a specific entity OA Can be classited as…

A: In statement of financial position, it includes Assets, Liabilities and Equity of the company are…

Q: Financial contracts are those which give simultaneous rise to the financial assets of one entity and…

A: Introduction: A financial contract is an arrangement in the form of an individually negotiated deal,…

Q: What are pro forma financial statements based on?

A: Pro forma financial statements are financial projections that show how a company's financial…

Q: Explain the concept of fair value accounting and its application in financial reporting. Discuss the…

A: Fair value accounting is an accounting approach that values assets, liabilities, or other financial…

Q: The elements of financial statements include investments by owners. These are increases in an…

A: Net asset is also called as equity because it is calculated as assets minus liabilities of the…

Q: major disclosure requirements for revenue accounts, capital. assets and liabilities

A: ANSWER:- For revenue accounts, companies typically need to disclose the amount of revenue…

Q: If an entity wants to account for investment property, it may choose between two accounting models.

A: The valuation of investment property is a must have feature in the presentation of the company’s…

Q: What factors need to be considered in determining whether a receipt is of an income or of a capital…

A: The essential distinction between Capital Receipt and Income is the "purpose" with which the asset…

Q: To determine the amount of debt a corporation has, the user should examine: O A. Income statement B.…

A: Introduction: Financial statements: 1 ) Income statement 2 ) Cash flows statement 3 ) Balance sheet.

Q: This is a representation or statement which may be expressly stated or implied by the responsible…

A: Lets understanding the basics.Subject matter of information means a actual information or data that…

Q: Ownership percentage can provide a reasonable explanation for the 1. Type of investment (financial…

A: Financial influence is referred to as the influence the investor can have over the…

Q: The following are discussed in the primary financial statement project, except: O a. aggregation and…

A: Primary financial statements consists of income statement, statement of equity, statement of cash…

Question

The concept of capital maintenance chosen by an entity shall determine the accounting model used in the preparation of its financial statements.

TRUE OR FALSE

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Depending on the business model for managing financial assets, an entity shall classify financial assets subsequent to initial recognition at a. fair value through profit or lossb. Amortized costc. Fair value through other comprehensive incomed. all of these are used in measuring financial assets
Depending on the business model for managing financial assets, an entity shall classify financial assets subsequent to initial recognition at
Discuss the significance of the following assumptions in the preparation of an entity’s financial statements: Entity assumption Accrual basis assumption Going concern assumption Period assumption
Which of the following statements are true regarding financial instruments? (i) Financial instruments comprise of both financial assets and financial liabilities (ii) A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. (iii) Primary instruments are financial instruments in which an investor has made an investment in a specific instrument. (iv) A derivate instrument is normally linked to a primary instrument and transfers the financial risks inherent in the underlying primary instrument. Select one: a. (i) and (ii) b. (i) and (iii) only c. (i) only d. (i), (ii), (iii) and (iv)
Under what cisrcumstances under PFRS 9 can an entity classify financial assets that meet the amortized cost criteria as at FVTPL? A. where the business model approach is adopted B. where the financial asset passes the contractual cash flow characteristics test C. where the instrument is held to maturity D. if doing so eliminates or reduces an accounting mismatch
How does this following assumptions relevant in the preparation of an entity’s financial statements: Accounting Entity Assumption Accural basis Assumption
If an entity wants to account for investment property, it may choose between two accounting models.
Match the element to the correct definition according to the International Accounting Standards Board's Conceptual Framework for Financial Reporting? Element Definition A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. Expense Liability The residual interest in the assets of the entity after deducting all its liabilities. A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. Asset Decrease in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities. Equity
The primary objective of financial management Can be in the form of a. Maximise the entity’s asset b. Minimise an entity’s liabilities c. Achieve a balance between risk and return d. Achieve a balance between current assets and current liabilities
The elements of financial statements include investments by owners. These are increases in an entity's net assets resulting from owners' Select one: All of these answer choices are correct. satisfaction of liabilities of the entity. transfers of assets to the entity. rendering services to the entity.
Explain why it is important for entities to understand the impact of the classification of a financial instrument as debt or equity in the financial statements
What is financial assets designated at FVOCI? Why does an entity used it? How?