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ACC325_WileyPlus_Ch2 - ( Relevance Reliability...

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(Qualitative Characteristics)   The qualitative characteristics that make accounting information useful for decision-making purposes are as follows.    Relevance Timeliness  Representational faithfulness   Reliability Verifiability Comparability   Predictive value Neutrality Consistency   Feedback value      Identify the appropriate qualitative characteristic(s) to be used given the information provided below.  (a)  Qualitative characteristic being employed when companies in the same industry are  using the same accounting principles. Comparability (b) Quality of information that confirms users' earlier expectations. Feedback value (c) Imperative for providing comparisons of a company from period to period. Consistency (d) Ignores the economic consequences of a standard or rule. Neutrality (e) Requires a high degree of consensus among individuals on a given measurement. Verifiability (f)  Predictive value is an ingredient of this primary quality of information. Relevance (g) Two qualitative characteristics that are related to both relevance and reliability. Comparability and Consistency (h) Neutrality is an ingredient of this primary quality of accounting information. Reliability (i) Two primary qualities that make accounting information useful for decision-making  purposes. Relevance and Reliability (j) Issuance of interim reports is an example of what primary ingredient of relevance? Timeliness (Elements of Financial Statements)   Ten interrelated elements that are most directly related to measuring the performance and financial status of an enterprise  are provided below.    Assets Distributions to owners Expenses   Liabilities Comprehensive income Gains   Equity Revenues Losses   Investments by owners     Identify the element or elements associated with the 12 items below.  (a)  Arises from peripheral or incidental transactions. Gains or losses (b) Obligation to transfer resources arising from a past transaction.  Liabilities (c) Increases ownership interest. Investment by owners or  Comprehensive income
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(d) Declares and pays cash dividends to owners. Distribution to owners (e) Increases in net assets in a period from nonowner sources. Comprehensive income (f)  Items characterized by service potential or future economic benefit. Assets (g) Equals increase in assets less liabilities during the year, after adding distributions to  owners and subtracting investments by owners.  Comprehensive income (h) Arises from income statement activities that constitute the entity's ongoing major or  central operations.
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ACC325_WileyPlus_Ch2 - ( Relevance Reliability...

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