(R20) Financial Reporting Standards

Question 1

Objective of financial reporting

Answer 1

Provide financial information that is useful to users

Question 2

What are standard-setting bodies and list two primary standard-setting bodies

Answer 2

Organizations that stablish financial reporting standards.

1. IASB
2. FASB

Question 3

What are regulatory authorities?

Answer 3

Enforce the financial reporting standards (Ex: SEC)

Question 4

Two fundamental characteristics of financial reports

Answer 4

1. Relevant - material info is relevant

2. Faithful representation - info is complete, neutral (without bias), and free from error

Question 5

Four enhancing characteristics of financial reports

Answer 5

1. Comparability
2. Verifiability
3. Timeliness
4. Understandability

Question 6

Measure of performance

Answer 6

Income statement (revenue, expenses)