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Questions and Answers
Which accounting standard-setting body is responsible for issuing Accounting Standards Codification (ASC) in the United States?
Which accounting standard-setting body is responsible for issuing Accounting Standards Codification (ASC) in the United States?
- Financial Accounting Standards Board (FASB) (correct)
- Securities and Exchange Commission (SEC)
- Governmental Accounting Standards Board (GASB)
- International Accounting Standards Board (IASB)
What is the primary objective of financial reporting according to the conceptual framework developed by the International Accounting Standards Board (IASB)?
What is the primary objective of financial reporting according to the conceptual framework developed by the International Accounting Standards Board (IASB)?
- To minimize expenses and liabilities.
- To provide information about the financial position, performance, and changes in financial position of an entity that is useful to a wide range of users for assessing the entity's prospects for future net cash inflows to the entity. (correct)
- To ensure compliance with tax regulations and legal requirements.
- To maximize profits for shareholders.
Which of the following is a characteristic of financial information that enhances its relevance?
Which of the following is a characteristic of financial information that enhances its relevance?
- Timeliness (correct)
- Faithful representation
- Neutrality
- Verifiability
Study Notes
Accounting Standard-Setting Bodies
- The Financial Accounting Standards Board (FASB) is responsible for issuing Accounting Standards Codification (ASC) in the United States.
Objectives of Financial Reporting
- The primary objective of financial reporting according to the conceptual framework developed by the International Accounting Standards Board (IASB) 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.
Characteristics of Financial Information
- Comparability is a characteristic of financial information that enhances its relevance, as it enables users to identify similarities and differences between two or more entities.
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Description
Test your knowledge of financial reporting and accounting standards with this quiz covering Chapter One topics.
