Untitled Quiz

Refers to a common set of accounting

principles, standard, and procedures issued

by the Financial Accounting Standard Board

(FASB).

System of ideas and objectives that lead to

the creation of a consistent set of rules and

standards. Specifically, in accounting, the

rule and standards set the nature, function

and limits of financial accounting and

financial statements

Financial information is

relevant if it can affect the

user’s decision.

Provides predictive

power regarding

possible future

events

Provides information

about past events

Financial information is

said to be faithfully

represented if the actual

transaction was presented

as it is.

Financial statements

should not exclude

any transaction

The degree to which

information is free from bias.

Note that there are

subjectivity and estimation

involved in financial

statements, therefore

information cannot be truly

“neutral.”

Users of information can

identify similarities and

differences between economic

events.

Refers to the comparability of financial

statements of the same entity but from

one period to another. Same entity but

from different period