Professional Documents
Culture Documents
Chapter- 02
Conceptual Framework of Accounting
Predictive Value
Feedback Value
Reliability- Information is reliable when
it has the objectivity.
Reliability-
oVerifiability
oRepresentational Faithfulness
o Neutrality
Secondary Qualities
Comparability- accounting
information should be comparable
with other enterprises
Consistency- means that company
should use the same accounting
principles and methods from year to
year
Financial statement elements
Assets
Liabilities
Equity
Revenues
Expenses
Recognition criteria for financial
statement items
Accounting Assumptions
Accounting Principles
Constraints or modifying
conventions
Accounting Assumptions
Business Entity-Every business to accounted
separately and distinctly from its owner or owners.