Listed below are several terms and phrases associated with the FASB’s conceptual framework. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it.
List A List B__________________ ___
_____ 1. Predictive value a. Decreases in equity resulting from transfers to owners.
_____ 2. Relevance b. Requires consideration of the costs and value of information.
_____ 3. Timeliness c. Important for making interfirm comparisons.
_____ 4. Distribution to owners d. Applying the same accounting practices over time.
_____ 5. Confirmatory value e. Users understand the information in the context of the decision being made.
_____ 6. Understandability f. Agreement between a measure and the phenomenon it purports to represent.
_____ 7. Gain g. Information is available prior to the decision.
_____ 8. Faithful representation h. Pertinent to the decision at hand.
_____ 9. Comprehensive income i. Implies consensus among different measurers.
_____ 10. Materiality j. Information confirms expectations.
_____ 11. Comparability k. The change in equity from nonowner transactions.
_____ 12. Neutrality l. The process of admitting information into financial statements.
_____ 13. Recognition m. The absence of bias.
_____ 14. Consistency n. Results if an asset is sold for more than its book value.
_____ 15. Cost effectiveness o. Information is useful in predicting the future.
_____ 16. Verifiability p. Concerns the relative size of an item and its effect on decisions.