Textbook Notes (369,067)
Canada (162,366)
Accounting (248)
ACCT 2220 (54)
m (7)
Chapter 2

ACCT NOTES - Chapter #2

2 Pages

Course Code
ACCT 2220

This preview shows 80% of the first page. Sign up to view the full 2 pages of the document.
ACCT NOTES – CHAPTER #2 Conceptual Framework of Accounting A coherent system of inter-related objectives and fundamentals that can lead to consistent standards and that prescribes the nature, function, and limits of financial accounting statements. The conceptual framework of accounting guides - Decisions about what to present in financial statements - Alternative ways of reporting economic events - Appropriate ways of communicating this information. Four Main Sections involved in the Conceptual Framework of Accounting: The objective of Financial Reporting: The main objective of financial reporting is to provide information that is useful to individuals who are making investment and credit decisions. Help users make decisions whether or invest of lend, or allocate their resources in some other way. Should provide info about the amounts, timing, and uncertainty of future cash flows, economic resources (assets) and claims on those resources (liabilities and equity) Should also include management’s explanations about the company’s financial activities. Qualitative Characteristics of Accounting Information: To be useful for decision making, information should have these qualitative characteristics: relevance, faithful representation, comparability, and understandability. - Relevance: accounting info has relevance if it will make a difference in user’s decisions and helps users make predictions on past, present and future transactions. Therefore it’s said to have predictive value. It also helps users confirm or correct previous expectations, therefore having feedback value. - Faithful Representation: Must be a faithful representation of what really exists or happened, representing economic reality. The information must be verifiable, neutral and complete. - Comparability: there is comparability when companies with similar circumstances us
More Less
Unlock Document

Only 80% of the first page are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.