What conceptual framework means?

What conceptual framework means?

A conceptual framework includes one or more formal theories (in part or whole) as well as other concepts and empirical findings from the literature. It is used to show relationships among these ideas and how they relate to the research study.

What are the components of conceptual framework?

The Framework

• the objective of general purpose financial reporting.
• qualitative characteristics of useful financial information.
• financial statements and the reporting entity.
• the elements of financial statements.
• recognition and derecognition.
• measurement.
• presentation and disclosure.

What is the conceptual framework and why is it important?

Defining The Conceptual Framework Shows the reader how different elements come together to facilitate research and a clear understanding of results. A tool (linked concepts) to help facilitate the understanding of the relationship among concepts or variables in relation to the real-world.

What is the conceptual framework intended to establish?

What is the conceptual framework intended to establish? The objectives and concepts for use in developing standards of financial accounting and reporting is correct. The concepts statements, also collectively called The Conceptual Framework, provide the general underpinnings for specific GAAP.

Which accounting assumption or principle is being violated?

Historical cost. Which accounting assumption or principle is being violated if a company is a party to major litigation that it may lose and decides not to include the information in the financial statements because it may have a negative impact on the company’s stock price? a. Full disclosure.

What is the first item presented in the notes to financial statements?

The first note to the financial statements is usually a summary of the company’s significant accounting policies for the use of estimates, revenue recognition, inventories, property and equipment, goodwill and other intangible assets, fair value measurement, discontinued operations, foreign currency translation.

Which of the following is a requirement for an accounting principle to be called generally accepted?

Which of the following is a requirement for an accounting principle to be called “generally accepted”? An authoritative accounting rule-making body has established it or it has been accepted because of its universal application.

Which measurement attribute is the most relevant?

Present value

How is revenue recognized?

Typically, revenue is recognized when a critical event has occurred, and the dollar amount is easily measurable to the company. For example, revenue accounting is fairly straightforward when a product is sold, and the revenue is recognized when the customer pays for the product.

What is a current cost?

Current cost is the cost that would be required to replace an asset in the current period. This derivation would include the cost of manufacturing a product with the work methods, materials, and specifications currently in use.

What is the difference between revenues and gains?

The primary difference between revenue and gains is that revenue is money generated through primary business activities, whereas gains are achieved through peripheral business activities. The difference between the sale price of an asset and its present book value is an example of a gain.

What are examples of gains?

Other examples of gains that could appear on a company’s income statement include:

• Gain on sale of investments.
• Gain on sale of building.
• Gain on legal settlement.
• Gain on early extinguishment of debt.

Is gain an income?

Between revenue and gain, the difference is that revenue always arises in the course of the business’ ordinary activities (e.g., sales of goods or sales of services), while gain represents other items that are considered as income which may or may not arise in the ordinary activities of the business or entity (e.g..

Is revenue an asset?

Revenue is tangentially related to an asset. However, it will report $50 in revenue and $50 as an asset (accounts receivable) on the balance sheet. It will also decrease the value of inventory for the amount it paid for the prescription it sold to the customer.

What are the 6 types of accounts?

Terms in this set (8)

• Assets. Anything of value owned by the business under its control and can be used by it in the future.
• Liabilities. Debts or obligations of the organization ( doesn’t always have to be cash)
• Expenses.
• Revenues.
• Owners equity.
• Retained earnings.
• Stock.
• Dividend.