ch02 - 2-1CHAPTER 2Conceptual FrameworkUnderlying Financial

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Unformatted text preview: 2-1CHAPTER 2Conceptual FrameworkUnderlying Financial AccountingASSIGNMENT CLASSIFICATION TABLETopicsQuestionsBriefExercisesExercisesCases1.Conceptualframeworkgeneral.1, 211, 22.Objectives of financialreporting.2, 533.Qualitative characteristicsof accounting.3, 4, 6, 241, 21, 244.Elements of financialstatements.7, 8, 93, 9, 1035.Basic assumptions.10, 11, 1244, 56.Basic principles:a. Historical cost.b. Revenue recognition.c. Expense matching.d. Full disclosure.13, 14, 1516, 17, 181920, 21, 2254, 554, 54, 5, 65, 65, 6, 7, 8, 9, 10, 117.Accountingprinciplescomprehensive.7, 88.Constraints.23, 24, 25, 266, 719.Comprehensive assign-ments on assumptions,principles, and constraints.84, 52-2ASSIGNMENT CHARACTERISTICS TABLEItemDescriptionLevel ofDifficultyTime(minutes)E2-1Qualitative characteristics.Moderate25-30E2-2Qualitative characteristics.Simple15-20E2-3Elements of financial statements.Simple15-20E2-4Assumptions, principles, and constraints.Simple15-20E2-5Assumptions, principles, and constraints.Moderate20-25E2-6Full disclosure principle.Complex20-25E2-7Accounting principlescomprehensive.Moderate20-25E2-8Accounting principlescomprehensive.Moderate20-25C2-1Conceptual frameworkgeneral.Simple20-25C2-2Conceptual frameworkgeneral.Simple25-35C2-3Objectives of financial reporting.Moderate25-35C2-4Qualitative characteristics.Moderate30-35C2-5Revenue recognition and matching principle.Complex25-30C2-6Revenue recognition and matching principle.Moderate30-35C2-7Matching principle.Complex20-25C2-8Matching principle.Moderate20-25C2-9Matching principle.Moderate20-30C2-10Qualitative characteristics.Moderate20-30C2-11MatchingethicsModerate20-252-3ANSWERS TO QUESTIONS1.A conceptual framework is a coherent system of interrelated objectives and fundamentals that canlead to consistent standards and that prescribes the nature, function, and limits of financialaccounting and financial statements. A conceptual framework is necessary in financial accountingfor 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 financialreporting.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 areasonable understanding of business.2. Provide information useful in assessing future cash flows.3. Provide information about enterprise resources, claims to these resources, and changes inthem....
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This note was uploaded on 01/17/2011 for the course ACCT 1 taught by Professor Rec during the Spring '07 term at CUNY Brooklyn.

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ch02 - 2-1CHAPTER 2Conceptual FrameworkUnderlying Financial

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