MGAC03H3 Study Guide - Final Guide: Asset, Reserve Requirement, General Ledger

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22 Aug 2016
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Effects on the selling price of shares. Effects on the amount of bonuses received by managers and other employees. Loss of competitive information to other companies. Present additional detail about an item on the financial statements. Provide additional information about an item not on the financial statements. Relevance: makes a difference in a decision, predictive value. Faithful representation: complete, neutral, reasonably free from error or bias. Timeliness: information must be available before its loses its usefulness. Understandability: allows reasonably informed users to see the significance of the information. Separate entity: activities of the business are separate from activities of owners. Continuity (going concern): the entity will not go out of business in the near future. Unit-of-measure: accounting measurements will be in the national monetary unit. Historical cost: cash equivalent cost given up is the basis for the initial recording of elements. Periodicity: to meet needs of decision makers, financial information is reported for short periods of time (weekly, monthly, yearly).

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