CH1 - Introduction to Accounting

Question 1

What is accounting?

Answer 1

The process of identifying, measuring, and communicating info to permit informed judegements and decisions by users of the info.

Question 2

What are fundamental qualities?

Answer 2

The 2 most important qualities: Relevance and Faithful representation

Question 3

Relevance

Answer 3

a qualtity that states that accounting info must be able to influence decisions

Question 4

Materiality

Answer 4

something which has the potential to alter the decisions that users make

Question 5

Faithful representation

Answer 5

a quality that says that accounting info should represent what it is supposed to represent - it should be complete, neutral, and free from error

Question 6

Comparability

Answer 6

a quality which helps users identify similarities and differences between items of info

Question 7

Verifiability

Answer 7

something that can be checked and verified

Question 8

Timeliness

Answer 8

being available early enough to be of use to users

Question 9

Understandability

Answer 9

clearly set out to facilitate understanding