The objective of general-purpose financial reporting is? to provide users with financial information that implies total freedom from error Oto provide companies with the option to select information that favors one set of interested parties over another Oto provide financial information about the reporting entity that is useful to present and potential equity investors, lende and other creditors in making decisions in tir capacity as capital providers Oto 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

The objective of general-purpose financial reporting is? to provide users with financial information that implies total freedom from error Oto provide companies with the option to select information that favors one set of interested parties over another Oto provide financial information about the reporting entity that is useful to present and potential equity investors, lende and other creditors in making decisions in tir capacity as capital providers Oto 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

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 7C

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Similar questions

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
What is the objective of financial reporting?a. Provide information that is useful to management in making decisions.b. Provide information that clearly portrays nonfinancial transactions.c. Provide information about the reporting entity that is useful to present andpotential equity investors, lenders, and other creditors.d. Provide information that excludes claims to the resources.
for financial reporting infromation to be useful it has to possess certain qualitataive attributes. explain how these qualitative attributes contribute to providing information that is useful to relevant stakeholders
Owe
Question: Accounting information is designed to meet the needs of: a. potential investors only. b. management c . government agencies only. d. Internal and external users. Required: please answer this question by choosing the right options.
Questions ? 1. What assumptions are made in financial reporting 2. What are characteristics that make financial statements useful to its users ? 3. What are the constraints faced in providing useful information ?
Which of the following statements is not correct? Select your answer. Different users have different objectives and priorities in analyzing financial statements. The ability of an entity to pay its currently maturing obligation is the concern of short-term creditors. Long-term creditors are more concerned with the solvency of a business entity. The financial statements are called general-purpose financial statements because different users have common needs and objectives in analyzing financial statements.
According to CF of IASB Determining how an asset or liability should be measured should ideally be linked to: Select one: a. All of above b. the perceived objectives of general purpose financial reporting c. to provide information beneficial to decisions involve buying, selling or holding equity and debt instruments, and providing or settling loans and other forms of credit. d. usefulness to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity
Which of the given options, is a limitation of financial reporting? (choose one answer only) a. financial reports can only provided all information needed by its primary users not other users b. financial reports are based on estimates and judgments rather that exact depiction c. financial reports can only provide information to help primary users estimate the value of the entity d. all of these are limitations of financial reporting
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.
Under the Conceptual Framework of Financial Reporting, users of financial information may be classified into? Heavy users (management) and slight users (public, government). Primary users (existing and potential investors and creditors) and other users. Internal users (employees, customers) and external users (investors, creditors). Main users (existing investors, creditors) and incidental users (potential investors, creditors)
The fundamental qualitative characteristics that financial information must possess to be useful to the primary users of general purpose financial reports—identified in the Conceptual Framework are ‘relevance’ and ‘faithful representation’. Required: a) Provide one example where information is relevant but not faithfully represented. (explain) b) Provide one example where information is not relevant but is faithfully represented. (explain) c) Provide one example where information is relevant and faithfully represented. (breifly explain)