FAR1C2 B Flashcards
What are the four (4) scope of Conceptual Framework?
1) Objective of — —
2) — — of — financial information
3) —, — and — of the elements from which financial — are —
4) Concepts of — and — —
1) Objective of financial reporting
2) Qualitative characteristics of useful financial information
3) Definition, recognition and measurement of the elements from which financial statements are constructed
4) Concepts of capital and capital maintenance
What is financial reporting?
It is the provision of financial — about an entity to — users that is useful to them in making economic — and for — the effectiveness of the entity’s —. It encompasses not only financial statements but also other — of — information that relates — or — to the financial — process.
It is the provision of financial information about an entity to external users that is useful to them in making economic decisions and for assessing the effectiveness of the entity’s management. It encompasses not only financial statements but also other means of communicating information that relates directly or indirectly to the financial accounting process.
It is the provision of financial information about an entity to external users that is useful to them in making economic decisions and for assessing the effectiveness of the entity’s management. It encompasses not only financial statements but also other means of communicating information that relates directly or indirectly to the financial accounting process.
Financial reporting
What are annual financial statements?
It is the principal way of providing financial information to external users.
It is the principal way of providing financial information to external users.
Annual financial statements or financial statements
What are financial reports?
They include not only financial statements but also other — such as financial —, — of important financial —, — of financial statements and significant —. They also include — information such as — of major — and a — of corporate — and —.
They include not only financial statements but also other information such as financial highlights, summary of important financial figures, analysis of financial statements and significant ratios. They also include nonfinancial information such as description of major products and a listing of corporate officers and directors.
They include not only financial statements but also other information such as financial highlights, summary of important financial figures, analysis of financial statements and significant ratios. They also include nonfinancial information such as description of major products and a listing of corporate officers and directors.
Financial reports
What is the objective of financial reporting?
The objective of financial reporting forms the — of the — —. The objective of financial reporting is the “—”, — or — of accounting.
The objective of financial reporting forms the foundation of the Conceptual Framework. The objective of financial reporting is the “why”, purpose or goal of accounting.
What is the overall objective of financial reporting?
Is to provide — — about the reporting entity that is useful to — and — —, — and other — in making — about providing — to the entity.
Is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity.
What is the target user of financial reporting?
Financial reporting is directed primarily to the — and — —, — and other — which compose the — user group.
Financial reporting is directed primarily to the existing and potential investors, lenders and other creditors which compose the primary user group.
Why financial reporting targeting the primary user group?
The reason is that existing and potential investors, lenders and other creditors have the most — and — — for information in financial reports. As a matter of fact, the primary users of financial information are the parties that — — to the entity. Moreover, information that meets the needs of the specified primary users is likely to — the — of other users such as employees, customers, governments and their agencies.
The reason is that existing and potential investors, lenders and other creditors have the most critical and immediate need for information in financial reports. As a matter of fact, the primary users of financial information are the parties that provide resources to the entity. Moreover, information that meets the needs of the specified primary users is likely to meet the needs of other users such as employees, customers, governments and their agencies.
Does management of a reporting entity is also interested in financial information of the entity?
—, however, management need — rely on general — financial — because it is able to — or — additional financial — internally.
Yes, however, management need not rely on general purpose financial reports because it is able to obtain or access additional financial information internally.
What are the three (3) specific objectives of financial reporting according to Conceptual Framework?
1) To provide information — in making decisions about providing — to the entity.
2) To provide information — in — the cash flow — of the entity.
3) To provide information about — —, — and — in resources and claims.
1) To provide information useful in making decisions about providing resources to the entity.
2) To provide information useful in assessing the cash flow prospects of the entity.
3) To provide information about entity resources, claims and changes in resources and claims.
Why general purpose financial reports are needed by primary users for economic decisions?
Existing and potential investors need general purpose financial reports in order to — them in making decisions whether to —, —, or — equity investments. On the other side, existing and potential lenders and other creditors need general purpose financial reports in order to — them in making decisions whether to — or — — and other forms of —.
Existing and potential investors need general purpose financial reports in order to enable them in making decisions whether to buy, sell, or hold equity investments. On the other side, existing and potential lenders and other creditors need general purpose financial reports in order to enable them in making decisions whether to provide or settle loans and other forms of credit.
Explain assessing cash flow prospects
1) Decisions by existing and potential investors about buying, selling, or holding equity instruments depend on the — that they — from an —, for example, —.
2) Similarly, decisions by existing and potential lenders and other creditors about — or settling — and other forms of — depend on the — and — payments or other — that they expect.
3) Consequently, financial reporting should provide — that is — in assessing the —, — and — of prospects for future net cash — to the entity.
1) Decisions by existing and potential investors about buying, selling, or holding equity instruments depend on the returns that they expect from an investment, for example, dividends.
2) Similarly, decisions by existing and potential lenders and other creditors about providing or settling loans and other forms of credit depend on the principal and interest payments or other returns that they expect.
3) Consequently, financial reporting should provide information that is useful in assessing the amount, timing and uncertainty of prospects for future net cash inflows to the entity.
