Chap 1 Acct

What characteristics is considered relevance?

• Materiality

  Completeness

  Verifiability

• Comparability

  Timeliness

  Free from Error

• Predictive

  Materiality

  Confirmatory

• Timeliness

  Understandability

  Comparability

What is considered faithful representation?

• Verifiiaability

  Timeliness

  Free from Error

• Timeliness

  Free from Error

  Materiality

• Completeness

  Neutrality

  Free from Error

• Materiality

  Completeness

  Free from Error

What is considered enhancing characteristics?

• Comparability

  Timeliness

  Verifiability

  Understandability

• Timeliness

  Completeness

  Free from Error

  Materiality

• Confirmatory

  Free from Error

  Completeness

  Nuetrality

• Predictive Value

  Confirmatory

  Materiality

  Compariabilty

Important enough to change a decision

• Comparability

• Materiality

• Verifiability

• Confirmatory

Can be independently corroborated or audited by another party

• Predictive Value

• Confirmatory

• Comparable

• Verifiable

Prior expectations for performance were met

• neutral

• confirmatory

• understandable

• free from error

why is financial accounting important?

• how much should they invest

• summarize economic activities to external users
  

• help fill out their income statement

• help finance money

how do financial statements communicate information about rate of return and risk?

• current ratio

• roa

• ca

• roe