10 Questions
What is the main purpose of a conceptual framework in financial accounting?
To provide a coherent system of interrelated objectives and fundamentals for consistent standards in financial accounting and reporting
What influences the development of a conceptual framework for financial reporting?
Principles versus Rules-based approaches to standard setting and decision theory approach
What is the focus of IASB in producing standards?
Consistent, coherent principle-based standards
How do rule-based standards potentially impact financial reporting?
Increase comparability and verifiability, and reduce earnings management
What does the development of a conceptual framework aim to achieve in financial reporting?
Consistent and coherent standards for financial accounting and reporting
Which principle specifies the nature and components of revenue, the measurement of revenue, and the timing of revenue recognition?
The revenue principle
What is the appropriate valuation basis for recognition of the acquisition of all goods and services, expenses, costs, and equities?
Historical cost
Which principle is justified in terms of its objectivity and the going-concern postulate?
The cost principle
Which principle specifies that the entity will continue indefinitely, therefore current values or liquidation values for asset valuation are not necessary?
The cost principle
Which principle emphasizes providing information that could influence the economic decisions of users?
The full disclosure principle
Test your knowledge of the Development, Theories, and Accounting Postulates in the Conceptual Framework for Financial Reporting with this quiz. Challenge yourself with questions related to the coherent system of interrelated objectives and fundamentals that guide consistent standards in financial accounting and reporting. Ideal for MMA, UiTM, and PA students.
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