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16 terms

ACCT 303 - Conceptual Framework

STUDY
PLAY
Predictive Value
information is useful in predicting the future
relevance
pertinent to the decision at hand
timeliness
information is available prior to the decision
distribution to owners
decreases in equity resulting from transfers to owners
feedback value
information confirms expectations
reliability
along with relevance, a primary decision-specific quality
gain
results if an asset is sold for more than its book value
representational faithfulness
agreement between a measure and the phenomenon it purports to represent
comprehensive income
the change in equity from non-owner transactions
materiality
concerns the relative size of an item and its effect on decisions
comparability
important for making inter-firm comparisons
neutrality
accounting information should not favor a particular group
recognition
the process of admitting information into financial statements
consistency
apply the same accounting practices over time
cost effectiveness
requires consideration of the costs and value of information
verifiability
implies consensus among different measures