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Flashcards in Conceptual Framework for Financial Reporting Deck (16)
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1

3 components of relevance

1. Predictive value
2. Confirmatory Value
3. Materiality

2

What is the process of converting noncash resources and rights into cash or claims to cash

Realization

3

What is the process of formally recording or incorporating an item into the financial statements

Recognition

4

What is the term for all changes in net assets of an entity during a period except those resulting from investments by owners and distributions to owners

Comprehensive Income

5

What is the term for inflows or other enhancements of assets of an entity or settlements of its liabilities from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing operations?

Revenues

6

What is the term for the quality of information that helps users to increase the likelihood of correctly forecasting the outcome of past or present events

Predictive Value

7

Measurement method for Long-Term Receivables

Present Value of future cash flows

8

Measurement method for Accounts Receivable

Net realizable value or settlement rate

9

Measurement method for Bonds payable, due in ten years

Present value of future cash flows

10

Measurement method for Trading Securtities

Current Market Value

11

Enhancing qualitative characteristic of relevance and faithful representation

Comparability

12

The amount of cash, or its equivalent, that could be obtained by selling an asset in orderly liquidation

Current Market Value

13

3 characteristics of "Faithful Representation"

1. Completeness
2. Neutrality
3. Free from error

14

Objective of financial reporting

useful decision making

15

2 Primary Qualitative Characteristics of Accounting Information

1. Relevance
2. Faithful Representation (formally reliability)

16

4 Enhancing Qualitative Characteristics of Accounting Information

1. Comparability
2. Verifiability
3. Timeliness
4. Understandability