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CHAPTER 2 CONCEPTUAL FRAMEWORK UNDERLYING FINANCIAL ACCOUNTING

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Question;21. In the International Accounting Standards Board?s (IASB?s);Conceptual Framework, qualitative characteristics are considered either;relevant or prudent.;22. In the International Accounting Standards Board?s (IASB?s);Conceptual Framework, qualitative characteristics distinguish better;information from inferior information for decision-making purposes.;23. In the International;Accounting Standards Board?s (IASB?s) Conceptual Framework, an enhancing;qualitative characteristic is predictive value.;24. In the International;Accounting Standards Board?s (IASB?s) Conceptual Framework, an ingredient of a;fundamental qualitative characteristic is understandability.;25. To be a faithful representation as described by the International;Accounting Standards Board?s (IASB?s) Conceptual Framework, information must be;confirmatory.;26. An enhancing quality as described by the International Accounting;Standards Board?s (IASB?s) Conceptual Framework is comparability.;27. Moon, Inc. applies different accounting treatments to similar;events from period to period. Moon, Inc. is violating verifiability as;described by the International Accounting Standards Board?s (IASB?s) Conceptual;Framework.;28. The International Accounting Standards;Board?s (IASB) definition of retained earnings is ?the residual interest in the;assets of the entity after deducting all its liabilities.?;29. The historical cost;principle would be of limited usefulness if not for the going concern assumption.;30. The economic entity;assumption means that economic activity can be identified with a particular;legal entity.;31. Materiality is one of the basic assumptions of accounting used by;the International Accounting Standards Board (IASB).;32. Periodicity is one of the basic assumptions of accounting used by;the International Accounting Standards Board (IASB).;33. Timeliness is one of the basic assumptions of accounting used by;the International Accounting Standards Board (IASB).;34. The periodicity assumption of accounting (used by the International;Accounting Standards Board) makes depreciation and amortization policies;justifiable and appropriate.;35. The IASB conceptual framework specifically;identifies accrual basis accounting as one of its fundamental assumptions.;36. One assumption made by the IASB conceptual;framework is that the reporting entity is a going concern.;37. The expense recognition;principle states that debits must equal credits in each transaction.;38. Revenues are recognized;in the accounting period in which the performance obligation is satisfied.;39. Supplementary information;may include details or amounts that present a different perspective from that;adopted in the financial statements.;40. Companies consider only;quantitative factors in determining whether an item is material.

 

Paper#55025 | Written in 18-Jul-2015

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