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Flashcards in Deck 1 Deck (8):
1

Ingredients of faithful representation include:

Completeness, neutrality, and freedom from error

2

Ingredients of relevance:

Predictive value, confirming value, and materiality

3

Two fundamental qualitative characteristics of financial reporting?

Relevance and faithful representation

4

Enhancing qualitative characteristics include:

Comparability, verifiability, timeliness, understandability

5

Conservatism principal

Recognize revenues/gains when the earnings process is complete; recognize expense/losses immediately

6

What happens when there is a "Change in entity"?

Financial statements of all prior periods presented should be restated

7

Revised depreciation =

Original cost - accumulated depreciation - any salvage value

8

A change from direct recognition to the installment method is considered what kind of change?

change in accounting principle inseparable from a change in accounting estimate