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Asked Jan 13, 2020
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Why is it necessary to develop a definitional framework
for the basic elements of accounting?

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Expert Answer

Step 1

Financial accounting: Financial accounting is the process of recording, summarizing, and reporting all the transactions in the financial statement of the business over a period of time. The financial statement consists of the balance sheet, income statement, statement of retained earnings, and the cash flow statement.

Step 2

Describe whether it is essential to develop a definitional framework for the basic elements of accounting:

Justification: The present scenario of accounting has more new terminologies with clear and specific definition. But the terms which are in use for a longer period without proper definit...

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