a.
Introduction: An attempt made by FASB to create concepts for directing the board to establish standards and for providing frame of reference for resolving accounting issues is represented by conceptual framework project.
To identify: The benefits that can be procured from FASB’s conceptual framework.
a.
Explanation of Solution
Some of the benefits that can be derived from conceptual framework are as follows:
- Conceptual framework provides guidelines to the FASB for developing accounting standards.
- The conceptual framework guides to provide authentic financial reporting so that user may understand it better and can rely on the information provided.
- It explains the nature, limits and functions of
financial accounting and reporting that helps in setting limits for preparing financial statement.
b.
Introduction: An attempt made by FASB to create concepts for directing the board to establish standards and for providing frame of reference for resolving accounting issues is represented by conceptual framework project.
Fundamental qualities that makes accounting information useful.
b.
Explanation of Solution
The accounting information is generally used for making decision purpose by various users. It will be useful only if the information provided is relevant and faithful. The decisions based on the authentic and relevant accounting information will be beneficial. Therefore, the two most important qualities of accounting information are relevance and faithfulness.
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Chapter 2 Solutions
EBK FINANCIAL ACCOUNTING THEORY AND ANA
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