Ch2

Front 1

conceptual framework

Back 1

provides
1 identifying the boundaries of financial reporting
2 selecting the transactions, other events, and the circumstances to be represented
3 recognized and measured
4 summarized and reported

FASB has issued seven statements of financila accounting concepts

Front 2

qualitative characteristics

Back 2

Accounting information MUST BE USEFUL FOR DECISION MAKING

1. relevance
2. faithful representation- complete, neutral, and free of material error

Front 3

enhancing qualities include...

Back 3

1. comparability- consistency
2. verifiability- occurs when independent measures, using the same methods obtain similar results
3. timeliness- having info available to decision makers before decisions are made.
4. understand-ability- comprehensive

Front 4

ELEMENTS are defined as

Back 4

ten basic elements that are most directly related to measuring the performance and financial status of a business defined by the SFAC

Front 5

elements are

Back 5

1. ASSETS- future economic benefits
2. LIABILITIES- future sacrifices of economic benefits
3. EQUITY- residual interest in the assets and remains after deducting its liabilities (ownership interest)
4. INVESTMENTS BY OWNERS
5. DISTRIBUTIONS TO OWNERS
6. COMPREHENSIVE INCOME- change in enitity during a pd.
7.REVENUES- increases in net assets of an entity during a pd.
8. EXPENSES- outflows or other using up of net assets during a pd.
9. GAINS - increases in net assets
10. LOSSES- decreases in net assets