What is a conceptual framework? Why is a conceptual framework necessary in financial accounting?
Explain how “materiality” is defined by both FASB and IASB.
September 19, 2019A cash flow of $250,000 may be received by Lydia Nickels, Inc. in one year, two years or three years, with probabilities of 25%, 60% and 35% respectively. The rate of interest on default risk-free investments is 6%. What is the expected present value of Lydia Nickel’s cash flow (in whole dollars)?
September 19, 2019What is a conceptual framework? Why is a conceptual framework necessary in financial accounting?
Question Description
Questions…
1. What is a conceptual framework? Why is a conceptual framework necessary in financial accounting?
2. What are the major objectives of financial reporting? Who uses financial reporting? What type of information will each user group need? Why?
3. Distinguish between cash-basis accounting and accrual basis accounting. Why is accrual-basis accounting acceptable for most businesses and the cash basis unacceptable.
