Which statement is included in the Conceptual Framework? Relevance is a fundamental qualitative characteristic of useful financial information Financial information without both relevance and faithful representation is not useful All of the above None of the above

Which statement is included in the Conceptual Framework? Relevance is a fundamental qualitative characteristic of useful financial information Financial information without both relevance and faithful representation is not useful All of the above None of the above

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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)
Which of the following is not considered as external users of general purpose financial statements a. Government b. Lenders C. Rank and file employees of the company d. Investors This fundamental characteristic requires a piece of information to be complete, neutral, and free from material error a. Faithful representation b. Relevance c. Verifiability d. Comparability Which of the following is not an enhancing characteristic a. Verifiability b. Comparability c. Understandability d. Relevance
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
Financial accounting examines monetary and non-monetary events. Select one: True False
In general, what is the conceptual framework that underlies accounting principles, and how does it encourage high-quality financial reporting?
Financial statements should be based on accounting principles alone and not serve the interests of any particular user group. Which characteristic of a good financial statement does this refer to? A. Reliability B. Relevant C. Comparable D. Neutral
What is not a financial statement assertion are:a. Accuracyb. Completenessc. Presentation and disclosured. Occurrence
5. Financial information should be neutral and bias free" is the dictation of which one of the following? A. Completeness concept B. Faithful representation Concept C. Objectivity Concept D. Duality Concept 6. Which of the following statements is not an objective of financial reporting? A. Provide information that is useful in investment and credit decisions. B. Provide information regarding policy of organisation C. Provide information that is useful in assessing cash flow prospective D. None of theses 7. A book containing a chronological record of business transaction & original record A. Journal B. Ledger C. Trial balance D. None of these 8. Which of these items would be accounted for as an expense? A. Repayment of bank Loan B. Dividend to stock holders C. The purchase of land D. Payment of current period rent
Which of the following statements about the process of developing a reformulated Balance Sheet is NOT correct? O 1. Derivative financial liabilities should be classified as financial obligations O 2. Lease interest should be classified as a financial expense O 3. Preference shares should be classified as a financial obligation O 4. Every asset can be clearly classified as an operating asset or financial asset. There is no judgement or uncertainty involved
Question: How does the Conceptual Framework for Financial Reporting reconcile the tensions between historical cost accounting and fair value accounting, and how does it strike a balance between providing relevant information for decision-making while ensuring the faithful representation of financial transactions in volatile and uncertain economic environments? ?
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'. a) Provide one example where information is relevant but not faithfully represented. b) provide one example where information is not relevant but is faithfully represented. c) provide one example where information is relevant and faithfully represented.
How should correction of errors be reported in the financialstatements?