Transactions and events are recognized initially at the exchange price to provide relevant and reliable information. . An accounting alternative is selected that is least likely to overstate assets and income. 9. The process of formally recording and reporting an item in the financial statements of a company. 10. The process of measuring and reporting the economic effects of transactions, events, and circumstances in the appropriate period when those effects occur, even though the cash consequences may occur in a different period.

Which of the following is the first step within hierarchy of guidance to which management refers, and whose applicability at considers, when selecting accounting policies? A. Apply the requirements in PFRS dealing with similar and related issues B. Apply a standard from PFRS if it specifically relates to the transaction, event, or condition C. Consider the applicability of the definitions, recognition criteria, and measurement concepts in the Conceptual Framework D. Consider the most recent pronouncements of other standard-setting bodies to the extent they do not conflict with PFRS or the Conceptual Framework?

Which of the following is a fundamental quality of useful accounting information?   Select one: Comparability  Consistency Relevance Materiality

Listed below are several types of pronouncements that the FASB issues. Following the lis is a series of descriptive statements. a. Statements of Financial Accounting Standards b. Interpretations c. Technical Bulletins d. Statements of Financial Accounting Concepts e. Guide for Imprementation   _____ Establishes a theoretical foundation upon which to base fanancial accounting and reporting standards.  _____ Provides clarification of conflicting or unclear issues relating to previously issued pronouncements. _____ FASB Q's and A's. _____ Establishes generally accepted accounting principles.  _____ Provides guidance on accounting and reporting problems related to an underlying standard.

Generally accepted accounting principles play an important role in financial reporting.a. What is meant by the phrase generally accepted accounting principles?b. What are the major sources of these principles?c. Is there a single comprehensive list of generally accepted accounting principles? Explain. d. What types of accounting reports are prepared in conformity with generally accepted account-ing principles?

Comparability is an enhancing qualitative characteristic that results in   Select one: rigid uniformity in the application of accounting principles. information that enables users to identify and understand similarities in and differences among financial statement items. greater use of judgment in the application of accounting standards. the ability of users to understand inherently complex phenomena.

Which of the following are considered secondary characteristics of accounting information? a. verifiability and feedback value b. predictive value and timeliness c. comparability and consistency d. representational faithfulness and neutrality

For which classification of users are financial statements prepared?  What characteristic of these users makes the development of generally accepted accounting principles necessary?

What are the two of the qualitative characteristics of accounting information that contribute to its relevance and representational faithfulness?

Describe briefly the following characteristics of useful accounting information.  Comparability (consistency).  Neutrality.