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What are the Fundamental Qualitative Characteristics?
- 1) Relevant
- 2) Faithful representation
What are the Enhancing Qualitative Characteristics?
- 1) Comparability
- 2) Verifiability
- 3) Timeliness
- 4) Understandability
What are the 3 ingredients information must have to be Relevant?
- 1) Predictive value
- 2) Feedback value
- 3) Materiality
What are the 3 ingredients information must have to be a faithful representation?
- 1) Neutrality
- 2) Completeness
- 3) Free from Error
What is the over-reaching constraint on all qualitative characteristics?
What are the objectives of financial reporting?
- 1) Balance Sheet provide direct information about the entity's financial position
- 2) Income statement provides direct information about the entity's performance
- 3) Cash flow stmt provides direct information about the entity's cash flows
- 4) Indirectly tells us about management's performance
List the 10 Key elements that make up all financial statements
- 1) Assets
- 2) Liabilities
- 3) Equity
- 4) Contributions
- 5) Distributions
- 6) Comprehensive income - Net income + DENT
- 7) Revenues
- 8) Expenses
- 9) Gains
- 10) Losses
List the 8 accounting rules and concepts that apply to all financial statement elements.
- 1) Consistency
- 2) Conservatism
- 3) Cost/benefit
- 4) Matching
- 5) Allocation
- 6) Full disclosure
- 7) Recognition
- 8) Realization
Define revenues and expenses
Inflows and outflows from normal ongoing operations
Define gains and losses
Not necessarily normal ongoing operations - (i.e. sale of equipment)
Identify the difference between recognition and realization
Recognition happens when recorded, realization happens when sold and cash is realized
An unrealized gain/loss on a trading security will be recorded where?
An unrealized gain/loss on an available-for-sale security will be recorded where?
Balance Sheet, in comprehensive income ("N" in DENT)
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