Objective and Qualitative Characteristics Flashcards
What is the primary objective of financial reporting?
To provide information that is useful for economic decision making.
Within the context of the qualitative characteristics of accounting information, which of the following is a fundamental qualitative characteristic?
Relevance
The objectives of financial reporting stem from which of the following sources?
The needs of the external users of the information.
According to the conceptual framework, the quality of information that helps users increase the likelihood of correctly forecasting the outcome of past or present events is called:
Predictive Value
Which of the following characteristics relates to both accounting relevance and faithful representation?
Comparability
Which of the following characteristics of accounting information primarily allows users of financial statements to generate predictions about an organization?
Relevance
According to the FASB conceptual framework, predictive value is an ingredient of:
Relevance: YES; Faithful Representation: NO
According to the conceptual framework, the process of reporting an item in the financial statements of an entity is:
Recognition
According to the conceptual framework, the objectives of financial reporting for business enterprises are based on:
The needs of the users of the information.
What is the conceptual framework intended to establish?
The objectives and concepts for use in developing standards of financial accounting and reporting.
During the period when an enterprise is under the direction of a particular management, its financial statements will directly provide information about:
Enterprise performance but not directly provide information about management performance.
Conceptually, interim financial statements can be described as emphasizing:
Timeliness over faithful representation.
