Chapter 2 - 2-11Chapter 2Qualities of Accounting...

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Unformatted text preview: 2-11Chapter 2Qualities of Accounting Information2Securities and Exchange Commission (SEC) has the legal authority to set the accounting rules for companies that are publicly traded.The SEC has delegated that responsibility to the accounting profession.Currently, the Financial Accounting Standards Board (FASB) is the standards-setting body.Who Sets the Rules?2-23GAAP (not a clothes store)Generally Accepted Accounting Principles (GAAP) are the rules that most companies follow in preparing their financial reports.GAAP are not exact rules: professional judgment is needed.Statements of Financial Accounting Concepts provide the basis and guidance for establishing accounting standards.4Statements of Financial Accounting ConceptsObjectives of accounting informationQualitative characteristics of accounting informationElements of financial statementsRecognition and measurement in financial statements2-35Objectives QualitiesTo provide useful information for decision-...
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Chapter 2 - 2-11Chapter 2Qualities of Accounting...

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