Conceptual Framework and Financial Reporting Flashcards
What are the fundamental qualitative characteristics of useful information?
Relevance and faithful representation
What does the concept of faithful representation include?
Includes neutrality, completeness, and freedom of error.
To be relevant, information should have which of the following?
Information should have a predictive value and/or confirming value and must be material.
What are the components of faithful representation?
Neutrality, freedom of error, and completeness.
Which of the following enhancing qualitative characteristics do Interim financial statements emphasize?
It emphasizes timeliness by providing financial information based on actual performance to date and estimates prior year-end.
What are the four qualitative characteristics?
Comparability, verifiability, timeliness, and understandability.
What expenses are considered general and administrative expenses?
Accounting and legal fees, office salaries, and insurance
