Accounting information is guided by various principles, assumptions and qualitative characteristics. 1. Describe the process of generating accounting information. 2. Identify and describe the assumptions, qualitative characteristics and framework which guide the preparation of accounting information. 3. Explain why accountants have flexibility in accounting choices. 4. Explain how the assumptions and qualitative characteristics of accounting guide the choice of the following accounting methods.

a. Revenue recognition b. Accounting for bad debts