Reference no: EM132659993

Problem 1: Which of the following best describes why a conceptual framework is necessary?

Option 1: To decrease the comparability of different companies' financial statements.

Option 2: To make financial statement preparation an automated process requiring no human intervention.

Option 3: To build all standards and rules upon a common foundation and increase financial statement users' understanding and confidence.

Option 4: To completely eliminate the potential for companies to exercise professional judgement in preparation of financial information.

Problem 2: Accounting information is considered to be relevant when it

Option 1: is capable of making a difference in a decision.

Option 2: is understandable by reasonably informed users of accounting information.

Option 3: is verifiable and neutral.

Option 4: can be depended on to represent the economic conditions and events that it is intended to represent.