Match the Financial Reporting Objective with the Reporting Approach Listed

question 75

Essay

Match the financial reporting objective with the reporting approach listed below.Place the letter corresponding to the reporting approach beside the related objective.
Objectives
Tax minimization Cash flow prediction Minimum compliance Performance evaluation Stewardship
Reporting Approach
A) Choose accounting policies that correlate earnings with future cash flows and provide extensive disclosures of information about future cash flows.
B) Associate economic costs and economic benefits.Separate items that are unusual, are less likely to occur in future, and are not the result of managerial decisions.
C) Recognize revenue as late as possible and recognize expenses as early as possible while being consistent with the Income Tax Act.
D) Provide historical, reliable information that will allow stakeholders to see how managers have managed entity resources over the reporting period.
E) Provide the minimum amount of information in the financial statements and notes that is required by any constraints.

• A) Choose accounting policies that correlate earnings with future cash flows and provide extensive disclosures of information about future cash flows.
• B) Associate economic costs and economic benefits.Separate items that are unusual, are less likely to occur in future, and are not the result of managerial decisions.
• C) Recognize revenue as late as possible and recognize expenses as early as possible while being consistent with the Income Tax Act.
• D) Provide historical, reliable information that will allow stakeholders to see how managers have managed entity resources over the reporting period.
• E) Provide the minimum amount of information in the financial statements and notes that is required by any constraints.

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Definitions:

Activity Variance

The difference between actual activity levels and those projected, affecting budgeted and actual costs.

Total Expenses

The sum of all costs and expenses associated with operating a business.

Flexible Budget

A financial planning tool that dynamically adjusts to volume or activity level changes.

Spending Variance

The variance between the real expenditure and the anticipated budget over a specific timeframe.