The Conceptual Framework

Question 1

Objective

Answer 1

To provide financial information that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity.

Question 2

Financial Information

Answer 2

General purpose financial reports which provide information to the entity’s economic resources, claims, and changes in resources and claims

Question 3

Qualitative Characteristics

Answer 3

Fundamental: Relevance and Faithful Representation

Enhancing: Comparability, Verifiability, Timeliness, Understandability

Question 4

Constraint and Assumption

Answer 4

Cost Constraint, Accrual Accounting, Going Concern

Question 5

Elements

Answer 5

Assets, Liabilities, Equity, Income, Expenses