MGAB01H3 Lecture Notes - Lecture 2: Current Liability, Retained Earnings, Share Capital
24 Oct 2017
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Top is known as the pinnacle of the triangle and focuses on the objective. To provide and capture business events for financial reports for the stakeholders. The bottom of the triangle is the foundation. Every item in the cpa item goes through these tests. The middle is 2 pieces, how does information become useful and their characteristics (qualitative characteristics). We want information to have important traits or characteristics. The right side are elements that are types of accounts that are used to capture information about the business and the company. Know the primary and secondary information, and may be a multiple choice question. Faithful representation: accurate information, unbiased reasoning and information without personal input, verifiable meaning auditors can look at the same information. Provided information can compare with other business in the same industry. Information that is understandable: recognition/de-recognition, measurement, presentation & disclosure. Recognition: assumption, control, revenue recognition recognized when you earn revenue and compete the earnings processes, matching principle.
