Homework Help:

Please identify whether true or false and also explain for false items.

1. Verifiability helps assure users that information faithfully represents the economic phenomena it purports to represent. 2. Financial reports are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyze the information diligently. 3. In assessing whether an item meets the definition of an asset, liability or equity,attention needs to be given to its 10 underlying substance and economic reality and not merely 239 its legal form. 4. Physical form is essential to the existence of an asset. 5. Obligations also arise from normal business practice, custom and a desire to maintain good business relations or act in an equitable manner. 21921 6. A decision by the management of an entity to acquire assets in the future gives rise to a present obligation. 7. The definition of income encompasses both revenue and gains. 8. The definition of income also includes unrealized gains; for example, those arising on the revaluation of marketable securities and those resulting from increases in the carrying amount of long-term assets. 9. The definition of expenses encompasses losses as well as those expenses that arise in the course of the ordinary Kidsipad am activities of the entity. 10. When losses are recognised in the income statement, they are usually displayed separately because knowledge CS Scanned with of them is useful for the purpose of making economic CamScanner decisions.1. The Conceptual Framework is not an PFRS and hence does not define standards for any particular measurement or disclosure issue. 2. The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders porand other creditors in making decisions about providing resources to the entity. 3. General purpose financial reports provide all of the information that existing and potential investors, lenders and other creditors need. 4. General purpose financial reports are designed to show the value of are porting entity. 5. Focusing on common information needs does not prevent the reporting entity from including additional information that is most useful to a particular subset of primary users. 6. . Accrual accounting depicts the effects of transactions and other events and circumstances on a reporting entity's economic resources and claims in the periods in which those effects occur, even if the resulting cash receipts and payments occur in a different period. 7. If financial information is to be useful, it must be relevant and faithfully represent what it purports to represent. 8. The usefulness of financial information is enhanced if it is comparable, verifiable, timely and understandable. 9. The fundamental qualitative characteristics are relevance and timeliness. 10. Faithful representation does not mean accurate in all C$ Scanned with respects. CamScanner