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

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

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 2MC: Which of the following is considered a constraint on useful information by Statement of Financial...

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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
Which is a correct statement below? A. An example of an obscured material information is the information is scattered throughout the financial statements.B. Potential investors are not considered as primary users of financial information.C. An information is immaterial if it will affect the decision of the primary users of the financial statements.D. Going concern assumption means that the accounting entity is viewed as continuing in operation definitely.
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 of the following statements about the IASB and FASB conceptual frameworks is not correct? a. The IASB conceptual framework does not identify revenues and gains as separate elements. b. The existing IASB and FASB conceptual frameworks are similar. c. The FASB and IASB agree that an objective of financial reporting is to provide useful information to investors and creditors. d. IFRS does not allow use of fair value as a measurement basis.
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)
What is probably the greatest single reason conventional financial statements are inadequate for analysis? a. Accrual accounting b. Historical cost c. Matching rule d. Going concern concept
Which of the following is not an advantage of accounting standards? Select one: a. All of the given answers are correct. b. It reduces the reliability of financial statements. c. It helps to attain uniformity in accounting. d. It provides guidance on the content and presentation of financial statements.
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
(Usefulness, Objective of Financial Reporting, Qualitative Characteristics) Indicate whether the following statements about the conceptual framework are true or false. If false, provide a brief explanation supporting yourposition.(a) The fundamental qualitative characteristics that make accounting information useful are relevance and verifiability.(b) Relevant information only has predictive value, confirmatory value, or both.(c) Information that is a faithful representation is characterized as having predictive or confirmatory value.(d) Comparability pertains only to the reporting of information in a similar manner for different companies.(e) Verifiability is solely an enhancing characteristic for faithful representation.(f) In preparing financial reports, it is assumed that users of the reports have reasonable knowledge of business and economic activities.
Which statement is incorrect regarding classification of financial assets? a. An entity can classify financial assets that meet the amortized cost criteria as at FVPL if doing so eliminates or reduces an accounting mismatch. B. In order to be classified at fair value through OCI, a debt instrument needs to have either simple principal and interest cash flows or be held in a business model in which both holding and selling financial assets are integral to meeting management’s objectives. C. An investment in equity instrument may not be classified as financial asset subsequently measured at amortized cost. D. Reclassifications of financial assets are only permitted on the change of an entity’s business model and are expected to occur only infrequently.
The following characteristics refer to financial accounting, excepta, Provides information to external usersb. Emphasizes on objective datac. Has no externally imposed standardsd. Generates general purpose financial statements.
The performance of an attestation engagement on prospective financial information does not require which of the following?a. If the basis of the prospective financial information is different from the financial statements, a reconciliation of the two must be provided.b. Management must disclose all significant assumptions used in generating the prospective financial information.c. Management must disclose significant accounting policies and procedures used in generating the prospective financial information.d. Management must disclose the probability of obtaining the results included in the prospective financial information.