Financial accounting is shaped to a significant extent, by the environment, and in particular all of the following, except Select the correct response: The means of measuring economic activity The overall organization of economic activity in society The many uses and users which it serves The characteristics and limitations of financial accounting and financial statements

Question: How does the Conceptual Framework for Financial Reporting reconcile the tensions between historical cost accounting and fair value accounting, and how does it strike a balance between providing relevant information for decision-making while ensuring the faithful representation of financial transactions in volatile and uncertain economic environments? ?

The fundamental qualitative characteristics that financial information must possess to be useful to the primary users of general purpose financial reports- identified in the Conceptual Framework are 'relevance' and 'faithful representation'.  a) Provide one example where information is relevant but not faithfully represented.  b) provide one example where information is not relevant but is faithfully represented. c) provide one example where information is relevant and faithfully represented.

Analysis relevant to the role of Accounting Theory in Financial Reporting; Issues clearly defined. Links madebetween theory and issues of the project.