FASB does not allow revaluations, except for some financial instruments that need to be carried out at fair value. 3�����Y�a5��*��w���4iޤ��9��� ����]�O�h%�R��-=@a�w7c��,5r�#5�����"Ոg!��B^�� M[��A-6b��2#e}8R����Vw��Ŝ��#+��` She believes she can earn 10% on average each year on her ... Insert semicolons, colons, and commas where needed, and delete them where they are unnecessary. 2 - Describe accrual accounting. Suppose there are two possible income distributions in a society of ten people. 2 - A company purchased a patent 4 years ago, and was... Ch. Is this unemploym... On the summary screen, you should sec an interactive chart. Analysis of costs for a shipping department Sales volume has been dropping at Mumford Industries. Discuss alternative strategies for selecting target markets. If a discovery of the remarkable health benefits of hot dogs were ... (Consumer Surplus) If, toward the end of the day, some people become indifferent whether or not they go on anot... Based on the information in this section, would you choose accounting as a career? 2 - What is the reporting entity assumption? 3. 2 - A friend, who is not an accounting major, is not... Ch. Provide the conceptual framework of the FASB. The Income Statement columns of the work sheet of Dunn Company for the fiscal year ended June 30 follow. 2 - Which characteristic states that accounting... Ch. 2 - Why should financial reporting provide useful... Ch. The FASB Conceptual Framework was established in 1973 as a comprehensible set of standards and rules intended to address and solve new emerging issues. The FASB’s goal remains improving the quality of financial reporting in the U.S. while advancing global comparability of financial reporting. ����^��n�{E���2\����ԃD Why is the Social Security payroll tax considered regressive? 2 - Violations of Assumptions and Principles The... Ch. 2 - What is the cost constraint, and how does it... Ch. The IASB/FASB conceptual framework revision project The joint conceptual framework project of the IASB and the FASB was initiated in 2002 as a direct result of the Norwalk Agreement, under which the two boards agreed to work jointly on future standards and to align existing ones. For example, the framework provides the Board with theoretical guidance in selecting transactions, events, and circumstances to be accounted for. At their joint meeting in October 2004, the IASB and the US FASB decided to add to their respective agendas a joint project to develop a common conceptual framework, based on and built on both the existing IASB Frameworkand the FASB Conceptual Framework, that both Boards would use as a basis for their accounting standards. 2 - According to Statement of Financial Accounting... Ch. FASB staff look at the issue and figure out what needs to be addressed; the FASB issues a document and asks for input on that topic from the public (discussion paper, preliminary view paper, comments) The Nielsen Company surveyed consumers in 47 markets from Europe, Asia-Pacific, the Americas, and the Middle Ea... Segregation of duties consists of separating what four basic functions? The Conceptual Framework is also a critical tool in the academic toolkit. A conceptual framework has the following benefits. 2 - List the reasons why external stakeholders use... Ch. Why Does the FASB Have a Conceptual Framework? c. A coherent set of accounting standards and rules should result. Define computer-integrated manufacturing. What'... What is a mutually exclusive project? Chapter 8 is similar to the rest of the FASB’s Conceptual Framework for Financial Reporting in that it establishes concepts for the Board to use in developing financial accounting and reporting standards. The FASB’s conceptual framework influence the development of new standards as they help inter formulate accounting standards. What are the... Ch. 2 - You have been hired as an accounting consultant by... Ch. Calculated with t... Tablet PC Comparison provides a wide variety of information about tablet computers. (International Trade) Why does international trade occur? b. By John M. (Neel) Foster, FASB Member, and L. Todd Johnson, Senior Project Manager Although some of the FASB’s constituents—especially those that interact with the Board on a regular basis—are quite familiar with the FASB’s conceptual framework, many others either are The main intent of the conceptual framework of the FASB is to establish objectives and fundamental concepts so as to help in development of the financial accounting and their reporting guidance. 1. recognition of revenue does not occur until. When completed, the framework is expected to be a coherent system of concepts that flow from the objective of financial reporting. according to the fasb conceptual framework which of the following statements conforms to the realization concept. The underlying concepts of the financial accounting guides in selection of the transaction and events that are to be accounted for, their recognition and measurements and the means of summarizing and communicating the given information to the financial statement users. 2 - What is the Objective: Useful Information for... Ch. SFAC # 6 is one of a series of publications in the FASB conceptual framework for financial accounting and reporting. 2 - What are the primary sources of useful information... Ch. Identify... Ch. 2 - An accountant must be familiar with the concepts... Ch. 2 - Under Statement of Financial Accounting Concepts... Ch. If the broom factorys workers ... A change in the labor market can change the equilibrium amount of labor employed, thus leading to a change in R... What is the risk of relying too heavily on the typical profiles of international negotiators? 2 - What drives expense recognition? How does economic growth influence the living standards of people? The framework for measuring fair value considers the concepts in FASB Concepts Statement No. to develop a common conceptual framework that is both complete and internally consistent The framework provides the Board with both a basis for setting standards and a set of concepts to use as tools to resolve any accounting and reporting questions that may arise. 2 - What is the Conceptual Framework of the FASB? b. The FASB’s conceptual framework is the core in which all accounting standards are derived. The main reasons for developing an agreed conceptual framework are that it provides a framework for setting accounting standards, a basis for resolving accounting disputes, fundamental principles which then do not have to be repeated in accounting standards. Do you consider that a. conceptual framework is more important for some parties than others? 2 - Describe the financial reporting model within the... Ch. Adjusting entries Halm Flooring Company uses a perpetual inventory system. Compare the price and output policy of a purely competitive industry with the policy that would be established ... Ch. The definitions and recognition criteria of these elements are very important and these are considered in detail below. 2 - Identify the enhancing characteristics of useful... Ch. The two boards reached the following tentative decisions about the approach to the project: Consider a broom factory that permanently closes because of foreign competition. 3. It facilitates the generation of useful accounting information to those making investment and credit decisions in a way that helps them understand a company's economic resources, the claims to them and the changes in them. The conceptual framework of FASB has laid foundation of objectives, concepts, principles and definitions which helps in leading a high –quality financial accounting standards and the appropriate application of those standards in accounting practice. Consider whether the proposed standard possesses the qualitative characteristics that make accounting information useful. 2 - What is the period-of-time assumption, and why is... Ch. Why is it important that the IASB and FASB share a common conceptual framework? The framework provides the FASB with a foundation for setting standards and concepts to use as tools … �7J�������������2"5�9�H��2MaZ��=P���6��^�m�5���}���L�B~�j��$Avi�,*sd2��+�?�r�H�9.K2����Pn��x|@��#��h鋨��a�OY}�,)C�=�R���@Ir�ㅧ���'G��WA���pD;�����r����$oW�OPD��ɒ4�]�� a. 2 - Accounting Assumptions The following is a list of... Ch. Why do accountants sometimes... Ch. It is suggested that several parties can benefit from a conceptual framework. The FASB is the most direct beneficiary of the framework. higher in the "hierarchy" of accounting standards, and expressly designed its Conceptual Framework not only for its own use, but also for preparers and users of financial statements (Heffes 2005). Q ��d9��)E�x����W�-|*��"=�Z����Df��/%-��DZr����Y\�t=�C)��. Draw a PPF that represents the production possibilities for goods X and Y if there are constant opportunity cos... Why does it matter whether a market is defined broadly or narrowly for purposes of antitrust policy? revenues of an entity are usually measured by the exchange values of the asset or liability involved. According to the FASB, the Conceptual Framework – or Concepts Statements – is comprised of interrelated objectives and fundamentals. 2 - What is recognition in accounting? 2 - What is materiality, and how does it relate to... Ch. 2 - Qualitative Characteristics The following is a... Ch. 2 - How do accounting concepts, principles, standards,... Ch. 2 - Objectives of Financial Reporting The FASB has... Ch. Disclosure Framework. Gross profit percent and markup percent Deere & Company (DE) produces and sells tractors, loaders, combines, la... To what extent are cash tips treated as remuneration subject to federal income tax withholding? One of the most important reasons to develop a conceptual framework is to be able to develop rules based on an established body of concepts. Being unable to quickly develop standards for rare situations is one limitation of the FASB. Ch. How would an increase in the world price of oil affect the amount of frictional unemployment? Explain why principles-based standards require a conceptual framework. Distinguish between operating mergers and financial mergers. Ch. At its July 8, 2009, meeting, the FASB added the disclosure framework project to its technical agenda with the intent to improve the effectiveness of financial statement disclosures by more clearly aligning disclosure information required by U.S. GAAP with information most important to financial statement users. Statements in the series are intended to establish objectives and fundamentals that will be the basis for development of financial accounting and reporting standards. The objectives serve as a guideline in accomplishing the goals and purpose of the financial reporting. Conceptual frameworks guide those who set standards in accounting during the establishment and review of financial reporting regulations. 1. What can cause it to change over time? 2 - What do the FASBs Concepts Statements establish? The conceptual framework provides basic financial reporting objectives, fundamental accounting and financial statement concepts, and ways to measure accounting information, recognize financial events and report them in the accounting system. 2 - The concept of the reporting entity is a... Ch. The Financial Accounting Standards Board’s (FASB) conceptual framework is an important force in shaping the nature of U.S. generally accepted accounting principles (GAAP). The outputs generated by the production process transformi... What is marginal product, and what does it mean if it is diminishing? With a conceptual framework, they will be able to solve out-of-the-ordinary accounting problems. The companys website enable... What is the natural rate of unemployment? The Financial Accounting Standards Board (FASB) produced most of its Conceptual Frame-work (CFW) more than 20 years ago in a project that began in the 1970s. 2 - Discuss the relationship among historical cost,... Ch. 2 - Compare and contrast comparability and... Ch. Conversely, a meaningful price floor must be ... Construct a production possibilities curve for a hypothetical country. 2 - The valuation of a promise to receive cash in the... Ch. Journalize the December 31 adjusting... Should organizations fear websites where consumers post negative messages about products and services? Ch. A Conceptual Framework should increase financial statement users' understanding and confidence in financial reporting. Practical problems should be more quickly solvable by reference to an existing Conceptual Framework. The merchandise inventory was destroyed by fire on December 13. 2 - Financial accounting and reporting provide... Ch. This suggests that conceptual issues are worked through at this level, rather than being guided by, and being consistent with, an overarching conceptual framework. Conceptual frameworks also help auditors to resolve financial reporting problems even when there are no standards for accounting. 2 - What is conservatism? The main reason for developing a conceptual framework are that gives a framework for setting accounting standards, a basis for resolving accounting disputes and fundamental principles which then do not have to be repeated in accounting standards. Revenue Recognition Revenue is an important indicator for users of financial reports in assessing a company’s performance and prospects. Which of the following are factors of production? 2 - A friend, who is not an accounting major, is... Ch. Does it really make much difference whether ... To be meaningful, a price ceiling must be below the market price. 2 - What is the most general objective of financial... Ch. endstream endobj 310 0 obj <>stream Along with other FASB Concepts Statements, FASB Concepts Statement No. 2 - What is the purpose of the FASBs Conceptual... Ch. In the first distribution, nine... Should an economic model describe reality exactly? 2 - Accruing net losses on obsolete inventory is an... Ch. When should... Ch. Average rate of return Determine the average rate of return for a project that is estimated to yield total inco... Mays Beauty Store records sales and purchase transactions in the general journal. It establishes definitions that are precise to help in discussing accounting issues. An economy produces hot dogs and hamburgers. 2 - Accruals and Deferrals Generally accepted... Ch. This project was undertaken because the Board believes that their standards must be based on ‘‘consistent principles.’’ The Conceptual Framework. Ch. How does... Ch. The projected income statement for the coming year, based on sales of ... Georgia McBeal is trying to save for her retirement. 8, Conceptual Framework for Financial Reporting, establishes the concepts that underlie financial reporting standards.
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