A conceptual framework consists of a set of principles with the purpose to: Select one: a....

A conceptual framework consists of a set of principles with the purpose to:

Select one:

a. assist users in the interpretation of information in financial statements.

b. assist standard setters to develop accounting standards.

c. all of the options are correct.

d. assist preparers of financial statements in the application of accounting standards and in dealing with topics that are not the subject of existing accounting standards.

Expert Solution

Solution is Option C: all of the options are correct.

The conceptual framework is the underlying framework of accounting. It consists of objectives and fundamentals. The objectives identify the purpose of financial reporting and fundamental concepts help achieve those objectives. They help in identifying, recording, summarising and reporting transactions and events thereby setting a standardised accounting practice all around the world.

Conceptual framework brings uniformity in accounting and hence make interpretation and comparison of information in the financial statements much easier. Accounting standards are set on the basis provided by conceptual framework. The fundamental concepts need not be repeated in accounting standards because it is implied. It also assist in application of accounting standards and to deal with new topics that are outside the purview of accounting standards

ekkarill92 answered 1 year ago

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