Q1, Which financial statement is not prepared primarily with the accrual basis of accounting in mind?...
Q1, Which financial statement is not prepared primarily with the accrual basis of accounting in mind?
a, All the financial statements required under generally accepted accounting principles are prepared primarily with the accrual basis of accounting in mind.
b, Statement of financial position
c, Statement of cash flows
d, Statement of comprehensive income
Q2, According to the FASB conceptual framework, which of the following situations violates the fundamental characteristic of relevance?
a, Financial statements are issued 50 days after the balance sheet date.
b, Financial statements include property with a carrying amount increased to management's estimate of market value.
c, Management reports to stockholders regularly refer to new projects undertaken, but the financial statements never report project results that are considered to have immaterial costs to date.
d, Data on segments having the same expected risks and growth rates are reported to analysts estimating future profits.
Homework Answers
Solution:
Q1. Option(C).Statement of cash flows is not prepared primarily with the accrual basis of accounting in mind.
Q2. Option(C) Financial statements include property with a carrying amount increased to management's estimate of market value.
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