Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 18

For the following questions, circle the best response.

Which of the following ideas is expressed in SFAC No. 1 ?

a. Financial reporting is not an end in itself but is intended to provide useful information to decision makers.

b. The objectives of financial reporting are subject to changes in the economic, legal, political, and social environments.

c. Information pertains to business entities rather than industries or the economy as a whole.

d. Approximate rather than exact measures must sometimes be used.

e. All of these ideas are expressed in SFAC No. 1.

Step 1 of 6

Statement of Financial Accounting Concepts (SFAC):

The statement of financial accounting concepts is a document which is issued by the Financial Accounting Standards Board (FASB). This document provides the definitions and concepts related to accounting and it is used as a guideline for developing accounting policies and standards for future.