Conceptual Framework - CPA Financial Accounting and Reporting (FAR)

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Question

The objectives of financial reporting, as set forth by the FASB conceptual framework, are based on which of the following?

Answer

FASB basis its objectives for financial reporting on the needs of the ultimate financial statement user.

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Question

Which of the following is true about both timeliness and understandability according to the FASB conceptual framework?

Answer

Enhancing qualitative characteristics of financial reporting include timeliness, understandability, comparability, and verifiability.

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Question

According to the FASB conceptual framework, revenue results from which of the following?

Answer

Revenue results from an overall reduction in liabilities, while expenses result from an overall increase in liabilities.

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Question

How should the nondeductible portion of meals and entertainment expenses be reported in the financial statements on the income tax basis?

Answer

Using the income tax basis, nondeductible expenses should be included in the expense category in determining income.

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