Identify the Eight Major Components of the Conceptual Framework for Accounting

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The Answer is •The eight components are: users of financial statements, needs/objectives of users, qualitative characteristics, elements, recognition criteria, measurement considerations, constraints and assumptions.
•The conceptual framework can be viewed and better understood as a plan for the supply of accounting information to meet the demands of potential users.
•Analysis of the demand for accounting information requires specifying the users (target market), their information needs (customer needs), and the desirable characteristics of information (desirable product characteristics).
•The supply side of a conceptual framework involves identifying the elements of financial statements (potential components), followed by criteria for recognition in the financial statements (product design), and measurement (customization to specific needs).
•Whether the supply of information is able to meet the users' demands also depends on constraints on financial reporting and the suitability of assumptions made in the planning process.

Identify the Eight Major Components of the Conceptual Framework for Accounting

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