Week 5 discussion accounting 2

Week 5 discussion accounting 2 - There are several...

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Unformatted text preview: There are several different pension plans out there that employers can and do offer their employees, and then there are several other retirement plans out there that people can invest in. a. High quality financial statements should reflect the real economics of the transaction being reported. In the U.S., we refer to this concept as representational faithfulness. A map's representational faithfulness may be determined by how well the map describes the coastline. In the same way, a financial statement's representational faithfulness may be evaluated by how well it represents the economic resources and obligations of the company, and by how well the transactions and events that change those resources and obligations are described. For example, suppose that a company reflects future costs in its income statement by setting up reserves in a profitable year and then reducing those reserves in a bad year when...
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This note was uploaded on 05/29/2011 for the course EC 2011 taught by Professor Johnson during the Spring '11 term at FIT.

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Week 5 discussion accounting 2 - There are several...

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