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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Exercise 2-35 Qualitative Characteristics

Listed below are the fundamental and enhancing qualitative characteristics that make accounting information useful.

• Relevance

• Verifiability

• Faithful representation

• Timeliness

• Comparability

• Understandability

Required:

  1. Match the appropriate qualitative characteristic with the statements below (items can be used more than once).
  2. When information is provided before it loses its ability, to influence decisions, it has this characteristic.
  3. When several accountants can agree on the measurement of an activity, the information possesses this characteristic
  4. If users can comprehend the meaning of the information. the information is said to have this characteristic.
  5. If information confirms prior expectations, it possesses this characteristic.
  6. If information helps to predict future events. it possesses this characteristic.
  7. Freedom from bias is a component of this characteristic.
  8. When several companies in the same industry use the same accounting methods, this qualitative characteristic exists.
  9. Information that accurately portrays an economic event satisfies this characteristic.

2. CONCEPTUAL CONNECI'ION Explain the purpose of the conceptual framework.

To determine

Concept Introduction:

The assumptions and principles which guide the recording and reporting of financial information are termed as accounting concept. The financial statements are basically the conclusion of the financial record during an accounting period.

Requirement 2

Explain the purpose of the conceptual framework.

Explanation

Conceptual framework is used as guidance in the preparation of financial statements. It helps is maintaining a common accounting standards which could be easily comprehend universally...

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