May 2021 1 242 Report
The following are characteristics, assumptions, principles, or constraints that guide the FASB when it creates?

1. Items not easily quantified in dollar terms are not reported in the financial statements.

2. Accounting information must be complete, neutral, and free from error.

3. Personal transactions are not mixed with the company’s transactions.

4. The cost to provide information should be weighed against the benefit that users will gain from having the information available.

5. A company’s use of the same accounting principles from year to year.

6. Assets are recorded and reported at original purchase price.

7. Accounting information should help users predict future events, and should confirm or correct prior expectations.

8. The life of a business can be divided into artificial segments of time.

9. The reporting of all information that would make a difference to financial statement users.

10. The judgment concerning whether an item’s size makes it likely to influence a decision maker.

11. Assumes a business will remain in operation for the foreseeable future.

12. Different companies use the same accounting principles.

Relevance

Periodicity assumptionGoing

concern assumption

Cost principleFull disclosure principle

Faithful representation

Monetary unit assumption

Comparability

Materiality constraint

Consistency

Cost constraint

Economic entity assumption

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