Which of the following best describes what we mean when we refer to the quality of financial statements? O A. Showing only revenue from product sells. B. Presenting all relevant information in a fair and complete manner. C. Listing all assets in alphabetical order. D. All of the above.
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- A recognition test assists with deciding whether items should be included in the financial statements. Which characteristic of a financial statement does this refer to? O A. Reliable O B. Complete OC. Material O D. Neutral Type here to searchWhich 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. verifiabilityExplain the following and describe its impact on the financial statements: a. cost principle b. conservatism c. time period assumption
- Which of the following is a fundamental characteristic of accounting information? Select one: O A. Predictive Value O B. Completeness OC. Faithful Representation O D. Comparability Tin FinishDiscuss the four basic Assumptions that underline the financial Accounting Structures with example. b) Match the qualitative characteristics below with the following statements. I. Relevance VI. Comparability II.Faithful representation VII.Completeness III. Predictive value VIII.Neutrality IV.Confirmatory value IX.Timeliness V. Free from error X. Understandability (i) Quality of information that permits users to identify similarities in and differences between two sets of economic phenomena. (ii) Having information available to users before it loses its capacity to influence decisions. (iii) Information about an economic phenomenon that has value as an input to the processes used by capital providers to form their own expectations about the future.PROBLEM Below is a list of the qualitative characteristics identified in FASB Statement of Financial Accounting Concepts No. 2. Following the list is a series of descriptive phrases. a. feedback value b. relevance c. decision usefulness d. reliability e. comparability f. predictive value g. varifiability h. consistency i. representational faithfulness j. timeliness k. neutrality _____ 4. When information is verifiable and neutral. _____ 5. Occurs when the measurement results can be duplicated. _____ 6. The overall qualitative characteristics accounting information should possess. _____ 7. When information enables decision makers to confirm prior expectations. _____ 8. When accounting information is reported the same way by different companies. Required: Match each characteristic with the appropiate phrase.
- . MULTIPLE CHOICE. Choose the best answer among the following choices. Time Dor SLUIC Monetary Unit 7. The principle of objectivity includes the concept of A. Summarization B. Verifiability C. Classification D. Conservatism 8. The financial accounting information is directed toward the common needs of users and is independent of presumptions about particular needs and desires of specific users. A. Completeness B. Verifiability C. Relevance D. Neutrality 9. The attribute of relevance include ALL EXCEPT: minator. A. Predictive value B. Feedback value C. Materiality D. Neutrality 10. The assumption that an entity will continue to operate for the foreseeable future is called A. Accrual basis B. Comparability C. Going concern D. Cash basisPROBLEM Below is a list of the qualitative characteristics identified in FASB Statement of Financial Accounting Concepts No. 2. Following the list is a series of descriptive phrases. a. feedback value b. relevance c. decision usefulness d. reliability e. comparability f. predictive value g. varifiability h. consistency i. representational faithfulness j. timeliness k. neutrality _____ 1. When information can make a difference in a decision. _____ 2. Making information available when it is needed. _____ 3. When accounting policies and procedures are unchanged from period ro period. _____ 4. When information is verifiable and neutral. _____ 5. Occurs when the measurement results can be duplicated. _____ 6. The overall qualitative characteristics accounting information should possess. _____ 7. When information enables decision makers to confirm prior expectations. _____ 8. When accounting information is reported the same way by different companies. Required: Match each characteristic…Ratios are an input into which step in the financial statement analysis framework? a. Collect input data b. Process data c. Analyze/interpret the processed data
- Which characteristic is applicable to financial statements when provision is made for all known expenses and losses, whether the amount is known for certain or just an estimate? O A. Completeness OB/Reliability O/C. Relevance OD. PrudenceThe relevance of providing information in financial statements is subject to the constraint of a.Faithful representation b.Cost-benefit c.Comparability d.Reliability2. Explain the following concept used in the preparation of financial statement i. Relevance ii. Reliability iii. Faithfull representation iv. Neutrality v. Completeness vi. Comparability