ACT 310 Chapter 02
ACT 310 Chapter 02
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
2-1
Conceptual Framework
True
False
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
2-5
Development of Conceptual Framework
2-8 LO 4
Conceptual Framework
Question
What are the Statements of Financial Accounting Concepts intended to
establish?
a. Generally accepted accounting principles in financial reporting
by business enterprises.
b. The meaning of “Present fairly in accordance with generally
accepted accounting principles.”
c. The objectives and concepts for use in developing standards of
financial accounting and reporting.
d. The hierarchy of sources of generally accepted accounting
principles.
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
2-10
First Level: Basic Objectives
Question
According to the FASB conceptual framework, the objectives
of financial reporting for business enterprises are based on?
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Describe the usefulness of a conceptual
5. Define the basic elements of financial
framework.
statements.
2. Describe the FASB’s efforts to construct a
6. Describe the basic assumptions of
conceptual framework.
accounting.
3. Understand the objective of financial
7. Explain the application of the basic
reporting.
principles of accounting.
4. Identify the qualitative characteristics of
8. Describe the impact that the cost
accounting information.
constraint has on reporting accounting
information.
2-13
Second Level: Fundamental Concepts
Illustration 2-2
Hierarchy of
Accounting Qualities
Illustration 2-7
Conceptual Framework for
Financial Reporting
2-16 LO 4
Second Level: Fundamental Concepts
Fundamental Quality—Relevance
Fundamental Quality—Relevance
Fundamental Quality—Relevance
Fundamental Quality—Relevance
Illustration 2-7
Conceptual Framework for
Financial Reporting
2-21 LO 4
Second Level: Fundamental Concepts
Enhancing Qualities
Enhancing Qualities
Enhancing Qualities
Enhancing Qualities
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
2-30
Basic Elements
Illustration 2-7
Conceptual Framework for
Financial Reporting
2-31 LO 5
Second Level: Basic Elements
Question
According to the FASB conceptual framework, an entity’s
revenue may result from
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
2-34
Third Level: Recognition and Measurement
Illustration 2-7
Conceptual Framework
for Financial Reporting
2-35 LO 6
Third Level: Basic Assumptions
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
2-38
Third Level: Basic Principles
Provided through:
Financial Statements
Supplementary information
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
2-43
Third Level: Constraints
2-45