How Does the Conceptual Framework Differ from an Accounting Standard

question 2

Multiple Choice

How does the Conceptual Framework differ from an accounting standard?

• A)The principles in the Conceptual Framework are designed to provide guidance and apply to a limited range of decisions relating to the preparation of financial reports while accounting standards apply to a wider range of decisions relating to the preparation of financial reports.
• B)The principles in the Conceptual Framework are specific in nature while accounting standards provide more general requirements for financial reporting.
• C)The principles in the Conceptual Framework are general concepts while accounting standards provide specific requirements for a particular area of financial reporting.
• D)The principles in the Conceptual Framework provide specific requirements for a particular area of financial reporting while accounting standards are designed to provide general guidance.

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Definitions:

Progressive

Pertaining to ideas, policies, or attitudes favoring progress, change, improvement, or reform, particularly in social conditions.

Average Tax Rate

The proportion of total income that is paid in taxes, calculated by dividing the total amount of taxes paid by total income.

Marginal Tax Rate

The rate at which your last dollar of income is taxed, indicating the tax rate applied to the next dollar of taxable income.

Excise Tax

Excise tax is a specific type of tax imposed on certain goods, services, and activities, often included in the price of products like tobacco, alcohol, and gasoline.