Ch. 1 - The Conceptual Framework Flashcards
What are the 10 ELEMENTS of the Conceptual Framework?
Assets, liabilities, equity, investments by owners, distributions to owners, revenues, expenses, gains, losses, comprehensive income.
What is the objective of financial accounting?
To provide Information that is useful to capital providers.
What are the 4 ASSUMPTIONS Of the Conceptual Framework?
Economic entity, going concern, periodicity, monetary unit.
What are the 4 PRINCIPLES of the Conceptual Framework?
Full disclosure, historical cost, revenue recognition, matching.
What are the 2 Fundamental Qualitative Characteristics of the Conceptual Framework?
Relevance and faithful representation
What are the 4 ENHANCING qualitative characteristics of the conceptual framework?
Comparability including consistency, verifiability, timeliness, understandability.
What is a constraint of the conceptual framework?
Cost-effectiveness
What are the 6 types of financial statements?
Balance Sheet, Income Statement, Statement of Comprehensive Income, Statement of Cash Flows, Statement of Shareholder Equity, Related Disclosures.
What is the overriding objective Of financial information?
Decision usefulness
What are the 3 components or aspects of relevance?
Predictive Value, Confirmatory Value, Materiality.
What are the 3 components or aspects of Faithful Representation?
Completeness, Neutrality, Free from Error.
