Financial Accounting Information

1.) The financial accounting information is directed toward the common needs of users and is independent of presumptions about particular needs and desires of specific users.

2.) It is the result of the standard of adequate disclosure.

3.) It is the ability to bring together for the purpose of noting similarities and dissimilarities.

The effects of transactions and other events are recognized when they occur and not as cash or its equivalent is received or paid, and they are recorded and reported in the financial statements of the periods to which they relate.

Which of the following is incorrect?

It is the capacity of information to make a difference in decision by helping users evaluate past, present or future events, or confirming, or correcting, their past evaluations.

It is the exercise of care and caution in dealing with uncertainties in measurement so as not to overstate assets and income and not understate liabilities and expenses.

If a business is not being sold or closed, the amounts reported in the accounts for assets used in the business operations are based on the cost of the assets. This practice is justified by

Financial reports communicated after an accounting decision has been made defeat the primary purpose of which characteristic?

Historically, managers, investors and accountants have generally preferred that possible errors in measurement be in the direction of understatement of net income and net assets.

Financial reporting is concerned only with information that is significant enough to affect evaluation or decision.

This accounting concept justifies the usage of accruals and deferrals.

The financial information must be comprehensible or intelligible if it is to be useful

In the event of conflict between the economic substance of a transaction and its legal form, the economic substance shall prevail. This concept is known as

Which accounting process is the recognition or non-recognition of business activities as accountable events?

Accountants do not recognize that the value of the peso changes over time. This concept is called the

The consistency standard of reporting requires that