Conceptual Framework of Financial

Question 1

The Conceptual Framework

Answer 1

Provides the general underpinnings for specific GAAP. It is a “constitution” for developing specific accounting principles.

Question 2

Decision usefulness primary characteristics

Answer 2

Faithful Representation and Relevance

Question 3

Characteristics of Faithful Representation

Answer 3

Completeness
Neutrality
Free From Error

Question 4

Characteristics of Relevance

Answer 4

Predictive Value
Confirmatory Value
Materiality

Question 5

Enhancing Characteristics

Answer 5

Comparability
Verifiability
Timeliness
Understand ability

Question 6

Accounting Assumptions

Answer 6

Entity is distinct
Going Concern
Unit of Measurement
Time Period

Question 7

Accounting Principles

Answer 7

Revenue Recognition
Expense Recognition
Measurement
Full Disclosure

Question 8

Revenue Accounting Principle

Answer 8

Revenue is recognized when relaized and earned

Question 9

Expense Recognition Principle

Answer 9

Referred to as matching principle, match expenses with revenue producing activities

Question 10

Net realizable value

Answer 10

The net rel