Ch02 - CHAPTER 2 CONCEPTUAL FRAMEWORK UNDERLYING FINANCIAL...

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CHAPTER 2 CONCEPTUAL FRAMEWORK UNDERLYING FINANCIAL REPORTING ASSIGNMENT CLASSIFICATION TABLE Topics Brief Exercises Exercises Problems Writing Assignments 1. Conceptual framework– general. 1, 5 2. Objectives of financial reporting. 2 3. Qualitative characteristics of accounting. 1, 2 1, 2 1, 7 4 4. Elements of financial statements. 5, 4 3 3 5. Foundational concepts: a. Historical cost. b. Revenue recognition. c. Expense matching. d. Full disclosure. 6, 7, 8, 9, 10, 11 1, 4, 5, 6, 10 5, 6 4, 5, 6, 11 4, 5, 6, 8 4, 5 4, 5, 6 3 6. Financial engineering 3 7. Constraints. 8, 10 1, 4, 5, 6 8. Comprehensive assignments on assumptions, principles, and constraints. 3, 9 4, 5, 6, 9, 10 2, 8
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ASSIGNMENT CHARACTERISTICS TABLE
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It e m Description Level of Diffic ulty Time (min utes) E 2- 1 Qualitative characteristics. Mode rate 20-25 E 2- 2 Qualitative characteristics. Simpl e 15-20 E 2- 3 Elements of financial statements. Simpl e 15-20 E 2- 4 Foundational concepts and constraints. Simpl e 15-20 E 2- 5 Foundational concepts and constraints. Mode rate 20-25 E 2- 6 Foundational concepts and constraints. Mode rate 25-30 E 2- 7 Accounting principles - comprehensive Mode rate 15-20 E 2- 8 Full disclosure principle. Comp lex 20-25 E 2- 9 Accounting principles–comprehensive. Mode rate 20-25 E 2- 1 0 Accounting principles–comprehensive. Mode rate 15-20 E 2- 1 1 Revenue recognition principle Mode rate 15-20 P 2- 1 Qualitative characteristics. Mode rate 30-35
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P 2- 2 Assumptions, principles, and constraints. Comp lex 20-25 P 2- 3 Financial engineering Mode rate 15-20 P 2- 4 Revenue recognition and matching principle. Comp lex 25-30 P 2- 5 Revenue recognition and matching principle. Mode rate 30-35 P 2- 6 Matching principle. Mode rate 20-30 P 2- 7 Qualitative characteristics. Mode rate 20-30 P 2- 8 Matching principle and measurement uncertainty Mode rate 20-30
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SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 2-1 (a) If the company converted its method of computing amortization from the straight-line method to an accelerated method, the consistency of the financial statements have been affected by a change in the method of applying the accounting principles employed. GAAP requires applying the change retroactively in order for consistency to be maintained. Retroactive application of the new accounting policy involves restating comparative financial statements. (b) The comparability of the financial statements has been affected by a business transaction, but there has been no change in any accounting principle employed or in the method of its application. The consistency has not been violated. The transaction would require informative disclosure in the financial statements. (c) If the company reduced the estimated remaining useful life of plant property because of obsolescence, the comparability of the financial statements has been affected. The change is not a matter of consistency; it is a change in accounting estimate required by altered conditions and involves no change
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This note was uploaded on 11/07/2010 for the course ACCT 1000 taught by Professor Curtis during the Spring '06 term at British Columbia Institute of Technology.

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Ch02 - CHAPTER 2 CONCEPTUAL FRAMEWORK UNDERLYING FINANCIAL...

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