Intermediate Accounting, 18th Edition, By Donald E
Intermediate Accounting, 18th Edition, by Donald E
Exam (elaborations)
Intermediate Accounting - Chapter 2 Exam
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Intermediate Accounting, 18th Edition, by Donald E
Institution
Intermediate Accounting, 18th Edition, By Donald E
Relevance - ANS Accounting information must be capable of making a difference in a decision.
Can be predictive, confirmatory, or both.
Example: UPS changes past or present expectations based on previous evaluations.
Faithful Representation - ANS The numbers and descriptions mat...
Intermediate Accounting, 18th Edition, by Donald E
Intermediate Accounting, 18th Edition, by Donald E
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Intermediate Accounting -
Chapter 2 Exam
, Relevance - ANS Accounting information must be capable of making a difference
in a decision.
Can be predictive, confirmatory, or both.
Example: UPS changes past or present expectations based on previous evaluations.
Faithful Representation - ANS The numbers and descriptions match what really
happened. Info must be complete, neutral, and free of material error.
Ex:
Predictive Value - ANS (Relevance)
Has value as an input to predictive processes used by investors to form their own
expectations about the future.
Ex: UPS analyzes current resources to claim the resources, dividend payments.
Confirmatory Value - ANS (Relevance)
Helps users confirm or correct prior expectations.
Ex: UPS issues year-end financial statements, then confirms or changes past or present
expectations based on previous evaluations.
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