Qualitative Characteristics Flashcards
1
Q
Faithful Representation
A
Faithful Representation is a fundamental qualitative characteristic rquired by financial information within reports. Recording and reporting must faithfully represent the substance of a real-world economic event or transaction. The real-world event in this case was the purchase of a non-current asset for use by employees in the office administration area. Resale as Inventory is speculative, so th business should only record it as Inventory if and when managment decides to make it available for resale like the other inventory
