At Lunch Recently, Two Accountants Were Discussing the Merits of the FASB's

question 85

Essay

At lunch recently, two accountants were discussing the merits of the FASB's conceptual framework project, which resulted in the publication of seven Statements of Financial Accounting Concepts and required more than ten years of effort.One accountant thought the effort was a waste of resources, since accounting was unlike physics, chemistry, and biology, where natural laws apply.The other accountant thought the effort was very valuable.He stated that "accounting, like any other discipline, benefits from having a coherent theory."
Required:
Write a brief essay that discusses the advantages that are derived from the existence of a conceptual framework for financial accounting and reporting.

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Definitions:

Direct Labor

The cost of wages for employees who are directly involved in the production of goods or services, considered a variable cost in financial accounting.

Direct Materials

This refers to raw materials that are directly incorporated into a finished product during the manufacturing process.

Materials Traceable

Raw materials or components that can be directly associated with a specific product or cost object in the manufacturing process.

Specific Products

Items or goods that have specific characteristics or purposes, distinguishing them from more general or broader categories of products.