The conceptual framework indicates the desired fundamental and enhancing qualitative characteristics of accounting information Several constraints impede achieving these desired characteristics. Answer each of the following questions related to these characteristics and constraints. 1. 2. Donald Kirk, former chairman of the FASB, once noted that "... there must be public confidence that the standard-setting system is credible, that selection of board members is based on merit and not the influence of special interests..." Which characteristic is implicit in Mr. Kirk's statement? 3. Which component would allow a large company to record the purchase of a $120 printer as an expense rather than capitalizing the printer as an asset? 7 Allied Appliances, Inc., changed its revenue recognition policies. Which characteristic is jeopardized by this change? National Bancorp, a publicly traded company, files quarterly and annual financial statements with the SEC. Which characteristic is relevant to the timing of these periodic filings? 4. 5. In general, relevant information possesses which qualities? 6. When there is agreement between a measure or description and the phenomenon it purports to represent, information possesses which characteristic? Jeff Brown is evaluating two companies for future investment potential. Jeff's task is made easier because both companies use the same Comparability
The conceptual framework indicates the desired fundamental and enhancing qualitative characteristics of accounting information Several constraints impede achieving these desired characteristics. Answer each of the following questions related to these characteristics and constraints. 1. 2. Donald Kirk, former chairman of the FASB, once noted that "... there must be public confidence that the standard-setting system is credible, that selection of board members is based on merit and not the influence of special interests..." Which characteristic is implicit in Mr. Kirk's statement? 3. Which component would allow a large company to record the purchase of a $120 printer as an expense rather than capitalizing the printer as an asset? 7 Allied Appliances, Inc., changed its revenue recognition policies. Which characteristic is jeopardized by this change? National Bancorp, a publicly traded company, files quarterly and annual financial statements with the SEC. Which characteristic is relevant to the timing of these periodic filings? 4. 5. In general, relevant information possesses which qualities? 6. When there is agreement between a measure or description and the phenomenon it purports to represent, information possesses which characteristic? Jeff Brown is evaluating two companies for future investment potential. Jeff's task is made easier because both companies use the same Comparability
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:The conceptual framework indicates the desired fundamental and enhancing qualitative characteristics of accounting information.
Several constraints impede achieving these desired characteristics. Answer each of the following questions related to these
characteristics and constraints.
1.
2.
Donald Kirk, former chairman of the FASB, once noted that "... there must
be public confidence that the standard-setting system is credible, that
selection of board members is based on merit and not the influence of
special interests..." Which characteristic is implicit in Mr. Kirk's statement?
3.
4.
Which component would allow a large company to record the purchase of a
$120 printer as an expense rather than capitalizing the printer as an asset?
7.
Allied Appliances, Inc., changed its revenue recognition policies. Which
characteristic is jeopardized by this change?
National Bancorp, a publicly traded company, files quarterly and annual
financial statements with the SEC. Which characteristic is relevant to the
timing of these periodic filings?
5.
In general, relevant information possesses which qualities?
6.
When there is agreement between a measure or description and the
phenomenon it purports to represent, information possesses which
characteristic?
Jeff Brown is evaluating two companies for future investment potential.
Jeff's task is made easier because both companies use the same
accounting methods when preparing their financial statements. Which
characteristic does the information Jeff will be using possess?
8
A company should disclose information only if the perceived benefits of the
disclosure exceed the costs of providing the information. Which constraint
does this statement describe?
Comparability
Expert Solution
Step 1
A conceptual framework is a type of document that helps a company in drafting policies in the absence of international financial reporting standards. The concept shows certain criteria to be followed in drafting the policies.
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