A Well-Designed AIS Can Respond to Many Parts of the FASB

question 7

Essay

A well-designed AIS can respond to many parts of the FASB Conceptual Framework.Descriptions of the assumptions, principles and constraints of the framework are listed below in alphabetic order.Group them as they are found in the conceptual framework.
a.A company will continue in business long enough to satisfy its current obligations.
b.A company's accounting records should be kept separate from those of its owner.
c.Absent other information, assets are recorded and reported at their purchase price.
d.Financial statements should include complete information for making decisions.
e.For financial reporting purposes, we divide the life of a business into quarters, years or some other measurement of time.
f.Revenue should be recorded in the AIS when goods and services are exchanged.
g.The benefits of obtaining information should outweigh the cost of obtaining it.
h.The costs of earning revenue should be put on the same income statement with the revenue they generate.
i.The value of a dollar is constant over time.
j.When a dollar amount is too small to make a significant difference in decision making, other accounting rules may be ignored.
k.When faced with a choice of methods, make the choice that puts the business in the worst possible financial light.

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Definitions:

Estimates Icon

A visual symbol or button in software applications that allows users to create or access estimates for goods or services.

Company Preferences

Configurations or settings chosen by a business to customize how their software applications operate to best meet their organizational needs.

Bad Debt Expense

Bad debt expense represents the amount of receivables that a company cannot collect, considered a business expense.

Sales Tax

A government-imposed levy on the sale of goods and services, contributing to public revenue.