CHAPTER 2 Conceptual Framework for Financial Reporting ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics 1. 2. 3. 4. 5. 6. Conceptual framework– general. Objectives of financial reporting. Qualitative characteristics of accounting. Elements of financial statements. Basic assumptions. Basic principles: a. Measurement. b. Revenue recognition. c. Expense recognition. d. Full disclosure. Accounting principles– comprehensive. Constraints. Assumptions‚ principles‚ and constraints. 28‚ 29‚ 30 10 11 Questions
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Solution sto Chapter 2 Problems Accounting Judgements Questions 1. Accounting principles include: (a) Underlying assumptions – basic underlying assumptions that make accounting possible. (b) Qualitative criteria – standards to judge policy choices in conjunction with reporting objectives. (c) Measurement methods – ways to measure results and financial position. 2. The importance of establishing a document such as the IASB’s Framework is that this material helps standard setters when
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* Solutions for Chapter 2 * Corporate Governance Review Questions: 2-1. Corporate governance is defined as: “a process by which the owners and creditors of an organization exert control and require accountability for the resources entrusted to the organization. The owners (stockholders) elect a board of directors to provide oversight of the organization’s activities and accountability back to its stakeholders.” The key players in corporate governance are the stockholders
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Shapiro: Chapter 2: Capital-Budgeting Principles and Techniques QUESTIONS 1. a. What is the relationship between accounting income and economic profit? Answer: Accounting income is calculated by taking revenues and subtracting all cash and non-cash expenses (such as depreciation). Accounting income also often recognizes losses for tax purposes as well‚ even though the economic loss may have taken place at another time. Economic profit is the sum of the present values of all the cash flows
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CHAPTER 2 CONCEPTUAL FRAMEWORK UNDERLYING FINANCIAL ACCOUNTING IFRS questions are available at the end of this chapter. TRUe-FALSe—Conceptual Answer No. Description F 1. Nature of conceptual framework. T 2. Conceptual framework definition. F 3. Levels of conceptual framework. T 4 International conceptual framework. F 5. Statements of Financial Accounting Concepts. T 6. Decision usefulness.Objective of financial reporting. F 7. Financial statement users. T 8. Relevance and
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Lamarsh Solutions Chapter-2 2.5 This is a question of probability‚ For molecules which have an approximate weight of 2‚ there are two 1H and we can find the probability or the percentage over 1 as‚ 0.99985*0.99985=0.99970 The same calculation can be made for the mol. weights of 3 and 4 For 3 there are one 1H and one 2 H and so‚ 0.99985*0.00015=1.49e-4 For 4 there are two 2 H and so‚ 0.00015*0.00015=2.25e-8 2.7 From table of nuclides we can find the atomic weights of O and H using the abundances
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CHAPTER 20 INVENTORY MANAGEMENT‚ JUST-IN-TIME‚ AND SIMPLIFIED COSTING METHODS 20-1 Cost of goods sold (in retail organizations) or direct materials costs (in organizations with a manufacturing function) as a percentage of sales frequently exceeds net income as a percentage of sales by many orders of magnitude. In the Kroger grocery store example cited in the text‚ cost of goods sold to sales is 76.8%‚ and net income to sales is 0.1%. Thus‚ a 10% reduction in the ratio of cost of goods sold to sales
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CHAPTER 2 SOLUTIONS TO B EXERCISES EXERCISE 2-1B (15–20 minutes) (a) True. (b) False – General-purpose financial reports helps users who lack the ability to demand all the financial information they need from an entity and therefore must rely‚ at least partly‚ on the information in financial reports. (c) False – Standard-setting that is based on personal conceptual frameworks will lead to different conclusions about identical or similar issues. As a result‚ standards will not be consistent
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Chapter 2 1. A conceptual framework is a coherent system of interrelated objectives and fundamentals that can lead to consistent standards and that prescribes the nature‚ function‚ and limits of financial accounting and financial statements. A conceptual framework is necessary in financial accounting for the following reasons: (1) It enables the FASB to issue more useful and consistent standards in the future. (2) New issues will be more quickly solvable by reference to an existing framework
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MONASH UNIVERSITY SEMSTER 1 – YEAR 2011 AFW 3040 – ACCOUNTING THEORY BY: SARAH WONG Assignment 2 – 1500-word Essay Topic: How social and environmental reporting practices undertaken by companies highlight the limitations of the conceptual framework. Introduction: Accountancy has always been concerned with mainly the accountability of directors to shareholders and companies to creditors. As companies grow larger and become more integrated with the society‚ this call for a focus towards sustainability
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