ACCT 103 Lecture Notes - Lecture 29: Conceptual Framework, Financial Statement, Going Concern

• School: American River College
• Department: Accounting
• Course: ACCT 103
• Professor: Pollard

Document Summary

Conceptual framework- set of related concepts that flows from objectives. We need a conceptual framework to develop a coherent set of standards and rules, not rely on personal standards. A conceptual framework should increase financial statement users" understanding of and confidence in financial reporting, and should be able to more quickly solve new and emerging practical problems by referring to an existing framework of basic theory. 7- provides a framework for cash flows and present values as a basis of. Objective- to provide financial information that is useful to present and measurement potential equity investors, lenders and other creditors in making decisions. General purpose financial reporting- helps users who lack the ability to demand all the financial information they need from an entity and rely on those reports. The second level forms a bridge between the why and how of accounting. A company chooses an acceptable accounting method that provides the most useful information for decision making purposes.