The IASB's Framework for Preparation and Presentation of Financial Statements

question 29

Multiple Choice

The IASB's Framework for Preparation and Presentation of Financial Statements (1989) implies that the most important group of users is:

• A) government.
• B) general public.
• C) creditors.
• D) investors.

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Definitions:

Financial Assets

Assets that derive value from a contractual claim, such as cash, stocks, bonds, and bank deposits.

Bad Debts Expense

An expense reported on the income statement, representing the estimate of receivables that are not expected to be collected.

Contra Account

An account used in the ledger to offset a related or a parent account, often showing the amount of reductions or adjustments to the main account.