Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 3, Problem 2BCC
Basis for Conclusions Case 2: Income Statement or
Certain transactions require a choice about which financial statement is more important—the income statement or the balance sheet Read paragraphs BC1.31 and BC1.32 in the basis for conclusions of Statement of Financial Accounting Concepts No 8, Conceptual Framework for Financial Reporting Chapter 1, The Objective of General Purpose Financial Reporting and Chapter 3, Qualitative Characteristics of Useful Financial Information.
- a. The original portion of the U.S. GAAP conceptual framework that dealt with the objectives of financial reporting (Concepts Statement 1) has now been superseded. What opinion did it express related to the importance of these two financial statements?
- b. What opinion did the original IFRS conceptual framework (the Framework) express related to the importance of these two financial statements?
- c. What opinion does the new conceptual framework under U.S. GAAP express regarding the importance of these two financial statements?
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Chapter 3 Solutions
Intermediate Accounting (2nd Edition)
Ch. 3 - Prob. 3.1QCh. 3 - Prob. 3.2QCh. 3 - Does U.S. GAAP require that companies disclose...Ch. 3 - Does IFRS require that companies disclose...Ch. 3 - Prob. 3.5QCh. 3 - Does IFRS require that companies disclose their...Ch. 3 - Prob. 3.7QCh. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Prob. 3.10Q
Ch. 3 - Prob. 3.11QCh. 3 - What is the Basis for Conclusions and where can...Ch. 3 - Prob. 3.13QCh. 3 - Prob. 3.14QCh. 3 - Prob. 3.1BECh. 3 - Judgment in Accounting for Plant and Equipment....Ch. 3 - Match Each Cognitive Bias Below with its...Ch. 3 - Prob. 3.4BECh. 3 - Prob. 3.5BECh. 3 - Prob. 3.6BECh. 3 - Prob. 3.7BECh. 3 - Codification Research. Referencing Appendix A,...Ch. 3 - Prob. 3.9BECh. 3 - Prob. 3.10BECh. 3 - Exercises E3-1. Accounting Policy Disclosures. To...Ch. 3 - Cognitive Bias. A team of accounting students is...Ch. 3 - Cognitive Bias. A team of accounting students is...Ch. 3 - Authoritative Literature. Provide the reference to...Ch. 3 - Authoritative Literature. Provide the reference to...Ch. 3 - Authoritative Literature. To what entity types...Ch. 3 - Authoritative Literature. How does FASB define...Ch. 3 - Prob. 3.8ECh. 3 - Prob. 1JCCh. 3 - Prob. 2JCCh. 3 - Prob. 1SSCCh. 3 - Surfing the Standards Case 2: Inventory...Ch. 3 - Basis for Conclusions Case 1: Judgment and...Ch. 3 - Basis for Conclusions Case 2: Income Statement or...
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- These are used by the FASB, and it is a set of concepts that guide financial reporting. A. Financial Accounting Standards Board (FASB) B. generally accepted accounting principles (GAAP) C. Securities and Exchange Commission (SEC) D. conceptual frameworkarrow_forwardIn general, how does the income statement help satisfy the objectives of financial reporting?arrow_forwardGenerally accepted guidelines formulated by FASB for the preparation of financial statements are called what? Group of answer choices general economic guidelines (GEG) general financial statement principles (GFSP) generally accepted economic guidelines (GAEG) generally accepted accounting principles (GAAP)arrow_forward
- Present a historical overview of International Financial Reporting Standards (IFRSs) starting with the Statements of Standard Accounting Practice (SSAP)arrow_forwardThe main objective of general-purpose financial reports is, a. To describe the characteristics for financial information. O b. To provide the financial information about the reporting entity c. To define the individual elements of the financial statements. O d. To provide an effective communication tool in the financial statements.arrow_forwardThe IASB’s Framework for the Preparation and Presentation of Financial Statements gives qualitative characteristics that make financial information reliable. Which of the following are examples of those qualitative characteristics? (1) Accruals (2) Faithful representation (3) Going concern (4) Neutrality Select one: a. 1 and 2 b. 2 and 4 c. 1 and 4 d. 2 and 3arrow_forward
- 6. Which statement is correct concerning interim financial reporting?I. An interim financial report may consist of a complete set of financial statement.II. An interim financial report may consist of a condensed set of financial statement. 7. An interim financial report shall include?I. Condensed statement of financial position and comprehensive incomeII. Accounting policies and explanatory notesarrow_forward2. Provide and explain two general types of prospective financial statements as defined in ISAE 3400 "The Examination of Prospective Financial Informationarrow_forward1. Why is the statement of financial position a logical place to begin a discussion of financial statements? 2. Distinguish between the terms classified, comparative, and consolidated as they apply to financial statements. May a given set of financial statements have more than one of these characteristics? 3. Why is the going concern assumption an important consideration in understanding financial statements?arrow_forward
- Owearrow_forwardExplain the main purposes of the Conceptual Framework for Financial Reporting and Identify the objective of general-purpose financial reporting, as stated in the Conceptual Frameworkarrow_forwardOne of the roles of financial markets is to: O A. conduct fiscal policy. O B. transfer funds from lenders to borrowers. OC. record statistics for official use.arrow_forward
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