CH02 - CHAPTER 2 Conceptual Framework Underlying Financial...

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Unformatted text preview: CHAPTER 2 Conceptual Framework Underlying Financial Accounting ASSIGNMENT CLASSIFICATION TABLE Topics Questions Brief Exercises Exercises Cases 1. Conceptual framework general. 1, 21 1, 2 2. Objectives of financial reporting. 2, 5 3 3. Qualitative characteristics of accounting. 3, 4, 6, 24 1, 2 1, 2 4 4. Elements of financial statements. 7, 8, 9 3, 9, 10 3 5. Basic assumptions. 10, 11, 12 4 4, 5 6. Basic principles: a. Historical cost. b. Revenue recognition. c. Expense matching. d. Full disclosure. 13, 14, 15 16, 17, 18 19 20, 21, 22 5 4, 5 5 4, 5 4, 5, 6 5, 6 5, 6, 7, 8, 9, 10, 11 7. Accounting principles comprehensive. 7, 8 8. Constraints. 23, 24, 25, 26 6, 7 1 9. Comprehensive assign- ments on assumptions, principles, and constraints. 8 4, 5 2-1 ASSIGNMENT CHARACTERISTICS TABLE 2-2 It e m Description Level of Difficu lty Time (minut es) E 2- 1 Qualitative characteristics. Moder ate 25-30 E 2- 2 Qualitative characteristics. Simple 15-20 E 2- 3 Elements of financial statements. Simple 15-20 E 2- 4 Assumptions, principles, and constraints. Simple 15-20 E 2- 5 Assumptions, principles, and constraints. Moder ate 20-25 E 2- 6 Full disclosure principle. Compl ex 20-25 E 2- 7 Accounting principlescomprehensive. Moder ate 20-25 E 2- 8 Accounting principlescomprehensive. Moder ate 20-25 C 2- 1 Conceptual frameworkgeneral. Simple 20-25 C 2- 2 Conceptual frameworkgeneral. Simple 25-35 C 2- 3 Objectives of financial reporting. Moder ate 25-35 C 2- 4 Qualitative characteristics. Moder ate 30-35 C 2- 5 Revenue recognition and matching principle. Compl ex 25-30 C 2- 6 Revenue recognition and matching principle. Moder ate 30-35 C 2- 7 Matching principle. Compl ex 20-25 2-3 C 2- 8 Matching principle. Moder ate 20-25 C 2- 9 Matching principle. Moder ate 20-30 C 2- 10 Qualitative characteristics. Moder ate 20-30 C 2- 11 Matchingethics Moder ate 20-25 2-4 ANSWERS TO QUESTIONS 1. A conceptual framework is a coherent system of interrelated objectives and fundamentals that can lead to consistent standards and that prescribes the nature, function, and limits of financial accounting and financial statements. A conceptual framework is necessary in financial accounting for the following reasons: 1. It will enable the FASB to issue more useful and consistent standards in the future. 2. New issues will be more quickly soluble by reference to an existing framework of basic theory. 3. It will increase financial statement users' understanding of and confidence in financial reporting. 4. It will enhance comparability among companies' financial statements. 2. The primary objectives of financial reporting are as follows: 1. Provide information useful in investment and credit decisions for individuals who have a reasonable understanding of business....
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CH02 - CHAPTER 2 Conceptual Framework Underlying Financial...

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