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MGAB01H3 Chapter 2: Chapter 2 Notes

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tealwasp399
10 Nov 2010
School
UTSC
Department
Financial Accounting
Course
MGAB01H3
Professor
Liang Chen

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MGAB01H3 Full Course Notes
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MGAB01H3 Full Course Notes
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Document Summary

Chapter 2: financial statements framework, presentation, and usage. The conceptual framework of accounting 8,. 4070398890241390770,90/4-0. 9;08 and fundamentals that can lead to consistent standards and that prescribes the nature, It ensures that existing standards and practices are clear and consistent. It makes it possible to respond quickly to new issues. It increases relevance, faithful representation, comparability, and understandability of financial reporting result. Accounting standards may differ from country to country so the international accounting. Standards board (iasb) decided to adapt a new accounting standard, international. Financial reporting standard (ifrs) starting january 1, 2011. Ifrs will only apply to profit oriented publicly traded companies (partnership and sole proprietorship will not have to adapt to this new standard) The conceptual framework of accounting has four main sections: N recognition and measurement criteria (assumptions, principles, and constraints) The main objective of financial reporting is to provide information that is useful to individuals who are making investment and credit decisions.

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Related Questions

19. The Czech Republic, Estonia, Hungary, Latvia, Lithuania,Poland, Slovakia and Slovenia joined the European Union in 2004. Inaddition to belonging to the EU, what do these countries have incommon?

A) They share a common language.

B) Formerly they were under the political and economic influenceof the Soviet Union.

C) All were under the political control of Germany until theearly 1960s.

D) They were former British colonies until after World WarII.

20. The initial harmonization efforts (1973-1988) of theInternational Accounting Standards Committee (IASC) createdstandards that have been described as the lowest common denominatorapproach. What was the effect of these first internationalaccounting standards?

A) IASC standards accommodated accounting practices in severalcountries.

B) Comparability of financial statements between countries.

C) It turned out that few companies complied with IASCstandards.

D) All of the above

21. Which of the following is NOT a goal of the InternationalAccounting Standards Board (IASB)?

A) Establish the global uniformity of accounting practice

B) Develop a unique set of executable global accountingstandards

C) Promote the use and application of global accountingstandards

D) Encouraging the convergence of national accountingstandards

22. The International Accounting Standards Board (IASB) waspreceded by:

A) the IOSCO

B) ASEAN

C) the IASC

D) the NRC

24. Which of the following is NOT part of the due processfollowed by the IASB in the formulation of International FinancialReporting Standards?

A) A public comment period is provided after the discussionpapers have been prepared.

B) The rules are unanimously approved by the 16 members of theboard.

C) Exposure drafts are published before a vote of the board ofdirectors.

D) National accounting standards and practices are studied priorto the preparation of exposure drafts.

25. What basis does the International Accounting Standards Board(IASB) use to formulate its IFRS?

A) Detailed rules for accounting practice

B) A framework of accounting principles

C) The tax laws typical of the western nations

D) Exceptions or unusual circumstances that require specialattention

What is a conceptual framework? Why is a conceptual frameworknecessary in financial accounting?

An ongoing dispute in accounting standard setting is whether theeconomic consequences of standard setting can, or should, supersedethe mandate in the conceptual framework for neutrality andrepresentational faithfulness per SFAC 2 (or neutrality andfaithful representation, per SFAC8). Brown (1990), Wyatt (1990),Wolk et al. and others address the balance between theseconsiderations. How should standard setters (e.g. FASB) approachthis issue?