Question Tag: Faithful Representation

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FR – NOV 2016 – L2 – Q2a – Conceptual Framework for Financial Reporting

Question tests understanding of substance over form concept in the conceptual framework and its importance in financial reporting.

Question

Conceptual framework for reporting emphasises the importance that transactions should be recorded on the basis of their substance over their form. Explain the importance of substance over form and why financial statements should show the substance of the underlying transaction different from its legal form.

Answer

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Tags: Conceptual Framework, Faithful Representation, Financial Statements, Substance Over Form
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: NOV 2016

FR – MAY 2021 – L2 – Q5b – Qualitative Characteristics

Distinguish between fundamental and enhancing qualitative characteristics in financial reporting.

Question

The Conceptual Framework for Financial Reporting identifies faithful representation as a fundamental qualitative characteristic of useful financial information.

Required:
Distinguish between fundamental and enhancing qualitative characteristics.
(4 marks)

Answer

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Tags: Enhancing Characteristics, Faithful Representation, Financial Reporting, Qualitative Characteristics
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: MAY 2021

FR – May 2018 – L2 – Q5a – Conceptual Framework for Financial Reporting

Explain the qualitative characteristics of financial statements under IFRS and assess how they make financial information useful

Question

Explain the following qualitative characteristics of financial statements reported under IFRS and assess how they make the information very useful:

i. Relevance
ii. Comparability
iii. Understandability
iv. Faithful Representation

Answer

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Tags: Comparability, Conceptual Framework, Faithful Representation, Financial Reporting, IFRS, Qualitative Characteristics, Relevance, Understandability
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: MAY 2018

FR – March 2023 – L2 – Q5a – Conceptual Framework for Financial Reporting

This question asks for an explanation of why faithful representation is important in financial reporting.

Question

The Conceptual Framework for Financial Reporting identifies faithful representation as a fundamental qualitative characteristic of useful financial information.

Required:
Explain why faithful representation is important. (5 marks)

Answer

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Tags: Conceptual Framework, Faithful Representation, Financial Reporting, Qualitative Characteristics
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: MAR 2023

FR – April 2022 – L2 – Q5a – Conceptual Framework for Financial Reporting

Justify how qualitative characteristics of financial information apply to tangible non-current assets using examples.

Question

The IASB’s Conceptual Framework identifies, among others, the qualitative characteristics of relevance, faithful representation, comparability, and understandability.

Required:
Justify with an example each how the qualitative characteristics will apply to the treatment of tangible non-current assets. (10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Comparability, Faithful Representation, Qualitative Characteristics, Relevance, Tangible Non-Current Assets, Understandability
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: APR 2022

CR – May 2016 – L3 – Q4b – Accounting and reporting concepts

Discuss the concepts of relevance, faithful representation, and comparability, and how they make financial information useful to users of financial statements.

Question

The qualitative characteristics of relevance, faithful representation and comparability identified in the IASB’s Framework for the preparation and presentation of financial statements (Framework) are some of the attributes that make financial information useful to the various users of financial statements.

Required: Discuss the concept of relevance, faithful representation and comparability and how they make financial information useful.

Answer

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Tags: Comparability, Faithful Representation, Financial Reporting, Qualitative Characteristics, Relevance
Level: Level 3

Topic: Accounting Concepts
Series: MAY 2016

CR – Nov 2016 – L3 – Q5d – Regulatory framework and ethics

Explain two constraints on relevance and faithful representation of financial statements.

Question

Two key constraints on relevance and faithful representation in financial statements are:

Timeliness:
- Information must be provided in a timely manner to be useful. However, if there is a delay in reporting, the relevance of the information diminishes. To achieve timeliness, financial statements may need to be prepared before all details of a transaction or event are fully known, which can impair faithful representation. Hence, there is often a trade-off between timeliness and accuracy.
Cost vs. Benefit:
- There is a balance between the cost of providing financial information and the benefit derived from it. In some cases, the cost of collecting and reporting detailed information may outweigh the benefits to users. This constraint limits how much detail can be provided, potentially affecting both the relevance and faithfulness of the representation of financial data.

Answer

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Tags: Constraints, Faithful Representation, Financial Reporting, Relevance
Level: Level 3

Topic: Regulatory Framework and Ethics
Series: NOV 2016

FA – Mar 2023 – L1 – Q1 – Double entry bookkeeping | Inventory | The IASB’s Conceptual Framework

Explains going concern assumption, inventory valuation, faithful representation, and prepares various day books and cash book.

Question

a) The Conceptual Framework for Financial Reporting is a set of principles which underpin the foundation of financial accounting. The Conceptual Framework sets out the going concern concept as one of the important underlying assumptions for the preparation of financial statements.

Required:
Explain what is meant by ‘the assumption that an entity is operating under the going concern concept’. Support your answer with a suitable example. (3 marks)

b) A trader who trades in Machines commences business on 1 Jan 2021 and buys 200 machines, each costing GH¢50,000. During the year, he sells 150 machines at GH¢60,000 each.

Required:
How should the remaining machines be valued at the end of the year if:
i) He is forced to close down his business at the end of the year and the remaining machines will realise only GH¢30,000 each in a forced sale. (2 marks)
ii) He intends to continue the business into the next year. (2 marks)

c) One of the fundamental qualitative characteristics of useful financial information in the Conceptual Framework for Financial Reporting is ‘faithful representation’.

Required:
Explain what is meant by ‘faithful representation’. (3 marks)

d) Davidco is a trader who commenced business on January 1, 2021. He introduced capital of GH¢50,000. He bought Vehicle worth GH¢30,000 out of the capital introduced. The following transaction took place in the month of January (Jan) 2021:

Jan 5: Davidco bought goods on credit from the following:
- Tradco: GH¢2,500, Trade Discount 10%
- Vamco: GH¢8,000, Trade Discount 10%
Jan 8: Davidco Sold goods on credit to the following:
- Markcom: GH¢5,000, Trade Discount 20%
- Kathrine: GH¢2,000, Trade Discount 5%
Jan 12: Davidco returned defective goods worth GH¢200 to Tradco.
Jan 15: Davidco paid all amounts outstanding to Tradco and Vamco less cash discount of 5%.
Jan 22: Kathrine returned spoiled goods worth GH¢300.
Jan 24: Davidco received payment from Markcom and Kathrine of all outstanding debt less cash discount of 5%.

Required:
Prepare the following:
i) Sales day book
ii) Purchase day book
iii) Cash book
iv) Purchase returns
v) Sales returns

(10 marks)

Answer

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Tags: Day Books, Faithful Representation, Going Concern, Inventory Valuation
Level: Level 1

Topic: Double entry bookkeeping, Inventory, The IASB’s Conceptual Framework
Series: MAR 2023

FR – NOV 2016 – L2 – Q2a – Conceptual Framework for Financial Reporting

Question tests understanding of substance over form concept in the conceptual framework and its importance in financial reporting.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Conceptual Framework, Faithful Representation, Financial Statements, Substance Over Form
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: NOV 2016

FR – MAY 2021 – L2 – Q5b – Qualitative Characteristics

Distinguish between fundamental and enhancing qualitative characteristics in financial reporting.

Question

The Conceptual Framework for Financial Reporting identifies faithful representation as a fundamental qualitative characteristic of useful financial information.

Required:
Distinguish between fundamental and enhancing qualitative characteristics.
(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Enhancing Characteristics, Faithful Representation, Financial Reporting, Qualitative Characteristics
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: MAY 2021

FR – May 2018 – L2 – Q5a – Conceptual Framework for Financial Reporting

Explain the qualitative characteristics of financial statements under IFRS and assess how they make financial information useful

Question

Explain the following qualitative characteristics of financial statements reported under IFRS and assess how they make the information very useful:

i. Relevance
ii. Comparability
iii. Understandability
iv. Faithful Representation

Answer

Find Related Questions by Tags, levels, etc.

Tags: Comparability, Conceptual Framework, Faithful Representation, Financial Reporting, IFRS, Qualitative Characteristics, Relevance, Understandability
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: MAY 2018

FR – March 2023 – L2 – Q5a – Conceptual Framework for Financial Reporting

This question asks for an explanation of why faithful representation is important in financial reporting.

Question

The Conceptual Framework for Financial Reporting identifies faithful representation as a fundamental qualitative characteristic of useful financial information.

Required:
Explain why faithful representation is important. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Conceptual Framework, Faithful Representation, Financial Reporting, Qualitative Characteristics
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: MAR 2023

FR – April 2022 – L2 – Q5a – Conceptual Framework for Financial Reporting

Justify how qualitative characteristics of financial information apply to tangible non-current assets using examples.

Question

The IASB’s Conceptual Framework identifies, among others, the qualitative characteristics of relevance, faithful representation, comparability, and understandability.

Required:
Justify with an example each how the qualitative characteristics will apply to the treatment of tangible non-current assets. (10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Comparability, Faithful Representation, Qualitative Characteristics, Relevance, Tangible Non-Current Assets, Understandability
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: APR 2022

CR – May 2016 – L3 – Q4b – Accounting and reporting concepts

Discuss the concepts of relevance, faithful representation, and comparability, and how they make financial information useful to users of financial statements.

Question

Required: Discuss the concept of relevance, faithful representation and comparability and how they make financial information useful.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Comparability, Faithful Representation, Financial Reporting, Qualitative Characteristics, Relevance
Level: Level 3

Topic: Accounting Concepts
Series: MAY 2016

CR – Nov 2016 – L3 – Q5d – Regulatory framework and ethics

Explain two constraints on relevance and faithful representation of financial statements.

Question

Two key constraints on relevance and faithful representation in financial statements are:

Timeliness:
- Information must be provided in a timely manner to be useful. However, if there is a delay in reporting, the relevance of the information diminishes. To achieve timeliness, financial statements may need to be prepared before all details of a transaction or event are fully known, which can impair faithful representation. Hence, there is often a trade-off between timeliness and accuracy.
Cost vs. Benefit:
- There is a balance between the cost of providing financial information and the benefit derived from it. In some cases, the cost of collecting and reporting detailed information may outweigh the benefits to users. This constraint limits how much detail can be provided, potentially affecting both the relevance and faithfulness of the representation of financial data.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Constraints, Faithful Representation, Financial Reporting, Relevance
Level: Level 3

Topic: Regulatory Framework and Ethics
Series: NOV 2016

FA – Mar 2023 – L1 – Q1 – Double entry bookkeeping | Inventory | The IASB’s Conceptual Framework

Explains going concern assumption, inventory valuation, faithful representation, and prepares various day books and cash book.

Question

Required:
Explain what is meant by ‘the assumption that an entity is operating under the going concern concept’. Support your answer with a suitable example. (3 marks)

b) A trader who trades in Machines commences business on 1 Jan 2021 and buys 200 machines, each costing GH¢50,000. During the year, he sells 150 machines at GH¢60,000 each.

c) One of the fundamental qualitative characteristics of useful financial information in the Conceptual Framework for Financial Reporting is ‘faithful representation’.

Required:
Explain what is meant by ‘faithful representation’. (3 marks)

Jan 5: Davidco bought goods on credit from the following:
- Tradco: GH¢2,500, Trade Discount 10%
- Vamco: GH¢8,000, Trade Discount 10%
Jan 8: Davidco Sold goods on credit to the following:
- Markcom: GH¢5,000, Trade Discount 20%
- Kathrine: GH¢2,000, Trade Discount 5%
Jan 12: Davidco returned defective goods worth GH¢200 to Tradco.
Jan 15: Davidco paid all amounts outstanding to Tradco and Vamco less cash discount of 5%.
Jan 22: Kathrine returned spoiled goods worth GH¢300.
Jan 24: Davidco received payment from Markcom and Kathrine of all outstanding debt less cash discount of 5%.

Required:
Prepare the following:
i) Sales day book
ii) Purchase day book
iii) Cash book
iv) Purchase returns
v) Sales returns

(10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Day Books, Faithful Representation, Going Concern, Inventory Valuation
Level: Level 1

Topic: Double entry bookkeeping, Inventory, The IASB’s Conceptual Framework
Series: MAR 2023

Question Tag: Faithful Representation

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FR – NOV 2016 – L2 – Q2a – Conceptual Framework for Financial Reporting

Question tests understanding of substance over form concept in the conceptual framework and its importance in financial reporting.

You're reporting an error for "FR – NOV 2016 – L2 – Q2a – Conceptual Framework for Financial Reporting"

FR – MAY 2021 – L2 – Q5b – Qualitative Characteristics

Distinguish between fundamental and enhancing qualitative characteristics in financial reporting.

Required: Distinguish between fundamental and enhancing qualitative characteristics. (4 marks)

You're reporting an error for "FR – MAY 2021 – L2 – Q5b – Qualitative Characteristics"

FR – May 2018 – L2 – Q5a – Conceptual Framework for Financial Reporting

Explain the qualitative characteristics of financial statements under IFRS and assess how they make financial information useful

You're reporting an error for "FR – May 2018 – L2 – Q5a – Conceptual Framework for Financial Reporting"

FR – March 2023 – L2 – Q5a – Conceptual Framework for Financial Reporting

This question asks for an explanation of why faithful representation is important in financial reporting.

You're reporting an error for "FR – March 2023 – L2 – Q5a – Conceptual Framework for Financial Reporting"

FR – April 2022 – L2 – Q5a – Conceptual Framework for Financial Reporting

Justify how qualitative characteristics of financial information apply to tangible non-current assets using examples.

You're reporting an error for "FR – April 2022 – L2 – Q5a – Conceptual Framework for Financial Reporting"

CR – May 2016 – L3 – Q4b – Accounting and reporting concepts

Discuss the concepts of relevance, faithful representation, and comparability, and how they make financial information useful to users of financial statements.

You're reporting an error for "CR – May 2016 – L3 – Q4b – Accounting and reporting concepts"

CR – Nov 2016 – L3 – Q5d – Regulatory framework and ethics

Explain two constraints on relevance and faithful representation of financial statements.

You're reporting an error for "CR – Nov 2016 – L3 – Q5d – Regulatory framework and ethics"

FA – Mar 2023 – L1 – Q1 – Double entry bookkeeping | Inventory | The IASB’s Conceptual Framework

Explains going concern assumption, inventory valuation, faithful representation, and prepares various day books and cash book.

You're reporting an error for "FA – Mar 2023 – L1 – Q1 – Double entry bookkeeping | Inventory | The IASB’s Conceptual Framework"

FR – NOV 2016 – L2 – Q2a – Conceptual Framework for Financial Reporting

Question tests understanding of substance over form concept in the conceptual framework and its importance in financial reporting.

You're reporting an error for "FR – NOV 2016 – L2 – Q2a – Conceptual Framework for Financial Reporting"

FR – MAY 2021 – L2 – Q5b – Qualitative Characteristics

Distinguish between fundamental and enhancing qualitative characteristics in financial reporting.

Required: Distinguish between fundamental and enhancing qualitative characteristics. (4 marks)

You're reporting an error for "FR – MAY 2021 – L2 – Q5b – Qualitative Characteristics"

FR – May 2018 – L2 – Q5a – Conceptual Framework for Financial Reporting

Explain the qualitative characteristics of financial statements under IFRS and assess how they make financial information useful

You're reporting an error for "FR – May 2018 – L2 – Q5a – Conceptual Framework for Financial Reporting"

FR – March 2023 – L2 – Q5a – Conceptual Framework for Financial Reporting

This question asks for an explanation of why faithful representation is important in financial reporting.

You're reporting an error for "FR – March 2023 – L2 – Q5a – Conceptual Framework for Financial Reporting"

FR – April 2022 – L2 – Q5a – Conceptual Framework for Financial Reporting

Justify how qualitative characteristics of financial information apply to tangible non-current assets using examples.

You're reporting an error for "FR – April 2022 – L2 – Q5a – Conceptual Framework for Financial Reporting"

CR – May 2016 – L3 – Q4b – Accounting and reporting concepts

Discuss the concepts of relevance, faithful representation, and comparability, and how they make financial information useful to users of financial statements.

You're reporting an error for "CR – May 2016 – L3 – Q4b – Accounting and reporting concepts"

CR – Nov 2016 – L3 – Q5d – Regulatory framework and ethics

Explain two constraints on relevance and faithful representation of financial statements.

You're reporting an error for "CR – Nov 2016 – L3 – Q5d – Regulatory framework and ethics"

FA – Mar 2023 – L1 – Q1 – Double entry bookkeeping | Inventory | The IASB’s Conceptual Framework

Explains going concern assumption, inventory valuation, faithful representation, and prepares various day books and cash book.

You're reporting an error for "FA – Mar 2023 – L1 – Q1 – Double entry bookkeeping | Inventory | The IASB’s Conceptual Framework"

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Required:
Distinguish between fundamental and enhancing qualitative characteristics.
(4 marks)

Required:
Distinguish between fundamental and enhancing qualitative characteristics.
(4 marks)