ACCOUTING PRIN SET LL INCLUSIVE
14th Edition
ISBN: 9781119815327
Author: Weygandt
Publisher: WILEY
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Students have asked these similar questions
Question 1
a.) Should financial Accounting be the same
everywhere? Discuss this question with
respect to the usefulness of Financial
Reporting Standards for Business Analysis and
Valuation.
b.) Explain how the qualitative criteria
relevance, timeliness and comparability
contribute to the usefulness of financial
information.
c.) Discuss the shortcomings of a statement of
financial position as a proxy for company
value.
Match each concept with the definition that best describes it.
Expense recognition principle (matching
[ Choose]
principle)
[ Choose ]
Accounting basis in which companies record transactions that change a company's financial statements in the periods in which the events occur.
Accounting basis in which companies record revenue when they receive cash and an expense when they pay out cash.
The principle that companies recognize revenue in the accounting period in which the performance obligation is satisfied.
Information that accurately depicts what really happened.
The principle that companies recognize expense in the period in which they make efforts (consume assets or incur liabilities) to generate revenue.
An assumption that accountants can divide the economic life of a business into artificial time periods.
Monthly or quarterly accounting time periods.
An accounting period that extends from January 1 to December 31.
Revenue recognition principle
Time period assumption
Calendar year…
Chapter 2 introduces you to the foundational principles and qualitative characteristics of accounting, which are as follows:
a) Economic entity assumption
b) Going concern assumption
c) Monetary unit assumption
d) Periodicity assumption
e) Historical cost principle
f) Revenue recognition principle
g) Matching principle
h) Full disclosure principle
i) Relevance
j) Reliability
k) Comparability
l) Representational faithfulness
For each situation that follows, identify the foundational principle of accounting or qualitative characteristics that are most applicable. Hint: Each item may be used more than once or not at all.
The earning process is completed and realized or realizable: __________
Quarterly financial reports: __________
The use of accruals and deferrals in adjusting the accounts: __________
Useful standard measuring unit for business transactions: __________
Including explanatory notes as part of the financial statements: __________
The affairs of the business are…
Knowledge Booster
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. verifiabilityarrow_forwardThat 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 assumptionarrow_forwardThe standards, procedures, and principles companies must follow when preparing their financial statements are known as which of the following? A. Financial Accounting Standards Board (FASB) B. generally accepted accounting principles (GAAP) C. Securities and Exchange Commission (SEC) D. conceptual frameworkarrow_forward
- Which of the following terms is used when assuming a business will continue to operate in the foreseeable future? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumptionarrow_forwardThe metrics based on financial numbers produced by the accounting system are ________. A. quantitative factors B. qualitative factors C. stakeholders D. stockholdersarrow_forwardEach of the following situations relates to a different company. A. For each of these independent situations, find the missing amounts. B. How would stakeholders view the financial performance of each company? Explain.arrow_forward
- According to Statement of Financial Accounting Concepts No. 8, to be relevant an earnings report is expected to have which of the following?arrow_forwardWhich of the following use financial statement data to make decisions? a. customers c. suppliers b. investors d. all of thesearrow_forwardList the three basic questions that must be answered when analyzing the effects of a business transaction on the accounting equation.arrow_forward
- Which is the only ratio required to be reported on the face of a companys financial statements? What are the two ways the ratio is required to be reported?arrow_forwardMatch the correct term with its definition. A. Financial Accounting Standards Board FASB) i. used by the FASB, which is a set of concepts that guide financial reporting B. generally accepted accounting principles (GAAP) ii. independent, nonprofit organization that sets financial accounting and reporting standards for both public- and private-sector businesses that use generally accepted accounting principles (GAAP) here in the United States C. Securities and Exchange Commission SEC) iii. standards, procedures, and principles companies must follow when preparing their financial statements D. conceptual framework iv. assumes a business will continue to operate in the foreseeable future E. going concern assumption v. independent federal agency protecting the interests of investors, regulating stock markets, and ensuring companies adhere to GAAP requirements F. time period assumption vi. companies can present useful information in shorter time periods such as years, quarters, or monthsarrow_forwardIndicate whether each statement describes financial accounting or managerial accounting. The information is directed at external users who are making decisions pertaining to investing, extending credit, and other decisions. The principal users are the organizations managers. The key focus is on the entity as a whole. The rules and principles are very flexible. The information gathered is usually available after an independent audit has been completed.arrow_forward
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