CFAS CHAPTER 3 PART 2

66問 • 11ヶ月前

Sab Sescon

通報

問題一覧

Arises when monetary amounts and financial reports cannot be observed directly and must instead be estimated.

measurement uncertainty

Can affect faithful representation if the level of uncertainty in providing an estimate is high.

measurement uncertainty

However, the use of reasonable estimate is an essential part of providing financial information and does not undermine the usefulness of the financial information.

measurement uncertainty

As long as the estimate is clearly and accurately described and explained, even a high level of measurement uncertainty does not affect the usefulness of the financial information.

measurement uncertainty

If information is to represent faithfully the transaction and other events it purports to represent, it is necessary that the transactions and events are accounted for in accordance with their substance and not merely their legal form.

substance overform

The economic substance of transactions and events are usually emphasized when economic substance differs from legal form.

substance overform

Is not considered a separate component of faithful representation because it would be redundant.

substance over form

Faithful representation inherently represents the substance of an economic phenomenon or transaction rather than merely representing the legal form.

substance over form

The terms of the lease provide that the lease transfers ownership of the asset to the lessee by the end of the lease term.

substance overform

In form, the contract is a lease as popularly understood. But in substance, in reality, if the "transfer of ownership" provision is to be considered, the real intent of the parties is uninstallment purchase of an asset by the lessee from the lessor.

substance overform

The pervasive use of accounting estimate, for example depreciation, doubtful accounts, contingencies, is an example of emphasizing _____

relevance over faithful representation

Reasonable approximations, although not perfectly reliable are prepared by financial statement users over either perfect information issue too late to make a decision or no information at all.

relevance over faithful representation

Is very reliable because it is based on objectively verifiable past information.

historical cost

However, historical cost is considered to be less current and therefore less relevant than market value.

faithful representation over relevance

The _____ relate to the presentation or form of the financial information.

enhancing qualitative characteristics

Are intended to increase the usefulness of the financial information that is relevant and faithfully represented.

enhancing qualitative characteristics

What are the enhancing qualitative characteristics?

comparability understandability verifiability and timeliness

Relevant and faithfully represented financial information is useful but the information would be most useful if it is comparable, understandable, verifiable and timely.

enhancing qualitative characteristics

Means the ability to bring together for the purpose of noting points of likeness and difference.

comparability

Is the enhancing qualitative characteristic that enables users to identify and understand similarities and dissimilarities among items.

comparability

COMPARABILITY may be made _____.

within an entity or between and across entities

_____ is the quality of information that allows comparisons within a single entity through time or from one accounting period to the next.

Comparability within an entity

COMPARABILITY WITHIN AN ENTITY is also known as?

horizontal comparability intracomparability

_______ is the quality of information that allows comparisons between two or more entities engaged in the same industry.

comparability between and across entities

COMPARABILITY ACROSS ENTITIES is also known as?

intercomparability dimensional comparability

For information to be comparable, like things must look alike in different things must look different.

comparability

Is not enhanced by making unlike things look alike or making like things look different.

comparability

Implicit in the qualitative characteristic of comparability is the _____

principle of consistency

Is not the same as comparability.

consistency

Refers to the use of the same method for the same item, either from period to period within an entity or in a single period across entities.

consistency

Comparability is the goal and ____ helps to achieve that goal.

consistency

Is the uniform application of accounting method from period to period within an entity.

consistency

Is the uniform application of accounting method between and across entities in the same industry.

comparability

Is desirable and essential to achieve comparability of financial statements.

consistency

Requires that financial information must be comprehensible or intelligible if it is to be most useful.

understandability

Accordingly, the information should be presented in a form and expressed in terminology that a user understands.

understandability

Classifying, characterizing and presenting information "clearly and concisely" makes it understandable.

understandability

An essential quality of information provided in financial statements is that it is readily understandable by users.

understandability

Accordingly, the user shall have an understanding of the complex economic activities, the financial accounting process and the terminology in the financial statements.

understandability

Financial reports are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyze the information diligently.

understandability

It is very essential because a relevant and faithfully represented information may prove useless if it is not understood by users.

understandability

Means that different knowledgeable and independent observers could reach consensus, although not necessarily complete agreement, that a particular depiction is a faithful representation.

verifiability

Information is _____ if different and knowledgeable and independent observers could reach similar conclusions based on the information.

verifiability

Verifiability implies?

consensus

The financial information is ____ in the sense that it is supported by evidence so that an accountant that would look into the same evidence would arrive at the same economic decision or conclusion.

verifiability

_____ financial information provides results that would be substantially duplicated by measurers using the same measurement method.

verifiability

Helps usured users that information represents the economic phenomenon or transaction it purports to represent.

verifiability

Verifiability is synonymous with?

objectivity

Verification can be?

direct or indirect

Means verifying an amount or other representation through direct observation, for example, by counting cash.

direct verification

Memes checking the inputs to a model, formula or other technique and recalculating the inputs in the same methodology.

indirect verification

An example is verifying the carrying amount of inventory by checking the inputs in quantities and costs, and recalculating the ending inventory using the same cost flow assumption, such as first in, first out.

indirect verification

Means that financial information must be available or communicated early enough when a decision is to be made.

timeliness

Information is ____ if it is received and time to make a difference to the decision maker.

timely timeliness

Relevant and faithfully represented financial information furnished after the decision is made is useless or of no value

timeliness

For example, the most important attribute of quarterly or interim financial information is?

timeliness

Generally, the older the information, the less useful.

timeliness

Some information may continue to be timely long after the end of reporting period because some users may need to identify and assess trends.

timeliness

Enhances the truism that without knowledge of the past, the basis for prediction will usually be lacking and without interest in the future, knowledge of the past is sterile.

timeliness

What happened in the past would become the basis of what would happen in the future.

timeliness

Is a pervasive constraint on the information that can be provided by financial reporting.

cost

Reporting financial information imposes _____ entities important that such _____ is justified by the benefit derived from the financial information.

cost

In other words, _____ is a consideration of the cost incurred in generating financial information against the benefit to be obtained from having the information.

cost constraint

The benefit derived from the information should exceed the cost incurred in obtaining the information.

cost constraint

However, the evaluation of the cost constraint is substantially a _____.

judgemental process

Assessing whether the cost of reporting out ways or falls short of the benefit is difficult to measure and becomes a matter of professional judgement.

cost constraint

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問題一覧

Arises when monetary amounts and financial reports cannot be observed directly and must instead be estimated.

measurement uncertainty

Can affect faithful representation if the level of uncertainty in providing an estimate is high.

measurement uncertainty

However, the use of reasonable estimate is an essential part of providing financial information and does not undermine the usefulness of the financial information.

measurement uncertainty

As long as the estimate is clearly and accurately described and explained, even a high level of measurement uncertainty does not affect the usefulness of the financial information.

measurement uncertainty

substance overform

The economic substance of transactions and events are usually emphasized when economic substance differs from legal form.

substance overform

Is not considered a separate component of faithful representation because it would be redundant.

substance over form

Faithful representation inherently represents the substance of an economic phenomenon or transaction rather than merely representing the legal form.

substance over form

The terms of the lease provide that the lease transfers ownership of the asset to the lessee by the end of the lease term.

substance overform

The pervasive use of accounting estimate, for example depreciation, doubtful accounts, contingencies, is an example of emphasizing _____

relevance over faithful representation

Reasonable approximations, although not perfectly reliable are prepared by financial statement users over either perfect information issue too late to make a decision or no information at all.

relevance over faithful representation

Is very reliable because it is based on objectively verifiable past information.

historical cost

However, historical cost is considered to be less current and therefore less relevant than market value.

faithful representation over relevance

The _____ relate to the presentation or form of the financial information.

enhancing qualitative characteristics

Are intended to increase the usefulness of the financial information that is relevant and faithfully represented.

enhancing qualitative characteristics

What are the enhancing qualitative characteristics?

comparability understandability verifiability and timeliness

Relevant and faithfully represented financial information is useful but the information would be most useful if it is comparable, understandable, verifiable and timely.

enhancing qualitative characteristics

Means the ability to bring together for the purpose of noting points of likeness and difference.

comparability

Is the enhancing qualitative characteristic that enables users to identify and understand similarities and dissimilarities among items.

comparability

COMPARABILITY may be made _____.

within an entity or between and across entities

_____ is the quality of information that allows comparisons within a single entity through time or from one accounting period to the next.

Comparability within an entity

COMPARABILITY WITHIN AN ENTITY is also known as?

horizontal comparability intracomparability

_______ is the quality of information that allows comparisons between two or more entities engaged in the same industry.

comparability between and across entities

COMPARABILITY ACROSS ENTITIES is also known as?

intercomparability dimensional comparability

For information to be comparable, like things must look alike in different things must look different.

comparability

Is not enhanced by making unlike things look alike or making like things look different.

comparability

Implicit in the qualitative characteristic of comparability is the _____

principle of consistency

Is not the same as comparability.

consistency

Refers to the use of the same method for the same item, either from period to period within an entity or in a single period across entities.

consistency

Comparability is the goal and ____ helps to achieve that goal.

consistency

Is the uniform application of accounting method from period to period within an entity.

consistency

Is the uniform application of accounting method between and across entities in the same industry.

comparability

Is desirable and essential to achieve comparability of financial statements.

consistency

Requires that financial information must be comprehensible or intelligible if it is to be most useful.

understandability

Accordingly, the information should be presented in a form and expressed in terminology that a user understands.

understandability

Classifying, characterizing and presenting information "clearly and concisely" makes it understandable.

understandability

An essential quality of information provided in financial statements is that it is readily understandable by users.

understandability

Accordingly, the user shall have an understanding of the complex economic activities, the financial accounting process and the terminology in the financial statements.

understandability

Financial reports are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyze the information diligently.

understandability

It is very essential because a relevant and faithfully represented information may prove useless if it is not understood by users.

understandability

Means that different knowledgeable and independent observers could reach consensus, although not necessarily complete agreement, that a particular depiction is a faithful representation.

verifiability

Information is _____ if different and knowledgeable and independent observers could reach similar conclusions based on the information.

verifiability

Verifiability implies?

consensus

The financial information is ____ in the sense that it is supported by evidence so that an accountant that would look into the same evidence would arrive at the same economic decision or conclusion.

verifiability

_____ financial information provides results that would be substantially duplicated by measurers using the same measurement method.

verifiability

Helps usured users that information represents the economic phenomenon or transaction it purports to represent.

verifiability

Verifiability is synonymous with?

objectivity

Verification can be?

direct or indirect

Means verifying an amount or other representation through direct observation, for example, by counting cash.

direct verification

Memes checking the inputs to a model, formula or other technique and recalculating the inputs in the same methodology.

indirect verification

Means that financial information must be available or communicated early enough when a decision is to be made.

timeliness

Information is ____ if it is received and time to make a difference to the decision maker.

timely timeliness

Relevant and faithfully represented financial information furnished after the decision is made is useless or of no value

timeliness

For example, the most important attribute of quarterly or interim financial information is?

timeliness

Generally, the older the information, the less useful.

timeliness

Some information may continue to be timely long after the end of reporting period because some users may need to identify and assess trends.

timeliness

Enhances the truism that without knowledge of the past, the basis for prediction will usually be lacking and without interest in the future, knowledge of the past is sterile.

timeliness

What happened in the past would become the basis of what would happen in the future.

timeliness

Is a pervasive constraint on the information that can be provided by financial reporting.

cost

Reporting financial information imposes _____ entities important that such _____ is justified by the benefit derived from the financial information.

cost

In other words, _____ is a consideration of the cost incurred in generating financial information against the benefit to be obtained from having the information.

cost constraint

The benefit derived from the information should exceed the cost incurred in obtaining the information.

cost constraint

However, the evaluation of the cost constraint is substantially a _____.

judgemental process

Assessing whether the cost of reporting out ways or falls short of the benefit is difficult to measure and becomes a matter of professional judgement.

cost constraint