Chapter 7_Lecture_Summer_2010

Chapter 7_Lecture_Summer_2010 - Study Objectives 1.

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
1. Explain the meaning of GAAP and identify the key items of the conceptual  framework. 2. Describe the basic objectives of financial reporting.  3. Discuss the qualitative characteristics of accounting information and  elements of financial statements.  4. Identify the basic assumptions used by accountants.  5. Identify the basic principles of accounting.  6. Identify the two constraints in accounting.  7. Understand and analyze classified financial statements.  8. Explain the accounting principles used in international operations. Study Objectives Study Objectives
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Various users need  financial information The accounting profession has  attempted to develop a set of  standards that are generally  accepted and universally practiced. Financial Statements Balance Sheet Income Statement Statement of Retained Earnings Statement of Cash Flows Note Disclosure Generally Accepted Generally Accepted Accounting Accounting Principles (GAAP) Principles (GAAP) The Conceptual Framework of Accounting The Conceptual Framework of Accounting
Background image of page 2
Securities and Exchange Commission (SEC) http://www.fasb.org/ http://www.sec.gov/ The Conceptual Framework of Accounting The Conceptual Framework of Accounting Organizations Involved in Standard Setting: Financial Accounting Standards Board (FASB)
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Conceptual Framework  - “…a constitution, a coherent system of  interrelated objectives and fundamentals.” FASB’s conceptual framework consists of the following: 1. Objectives of financial reporting. 2. Qualitative characteristics of accounting information. 3. Elements of financial statements. 4. Operating guidelines (assumptions, principles, and  constraints). The Conceptual Framework of Accounting The Conceptual Framework of Accounting
Background image of page 4
a) To provide information that is useful to those making investment and credit  decisions. a) Helpful in assessing future cash flows. a) Identify the economic resources (assets), the claims to those resources  (liabilities), and the changes in those resources and claims. Conceptual Framework Conceptual Framework Objectives of Financial Reporting
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Relevance   – making a difference in a decision. Predictive value Feedback value Timeliness Reliability Verifiable Representational faithfulness Neutral - free of error and bias Qualitative Characteristics Conceptual Framework Conceptual Framework
Background image of page 6
  – Information that is measured and reported in a  similar manner for different companies is considered comparable.  Consistency - When a company applies the same accounting  treatment to similar events from period to period. Qualitative Characteristics
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/08/2011 for the course ACCOUNTING 272 taught by Professor Stein during the Spring '11 term at Rutgers.

Page1 / 46

Chapter 7_Lecture_Summer_2010 - Study Objectives 1.

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online