CFAS #2 Review: PAS Standards and More
Conceptual Framework - correct answer ✔✔Provides a strong theoretical foundation and allows for the
systematic adaptation of accounting standards
Conceptual Framework - correct answer ✔✔Serves as a guide to resolving accounting issues that are not
addressed directly in Philippine Accounting Standards or Philippine Financial Reporting Standards or
Interpretations.
Conceptual Framework - correct answer ✔✔not a standard and hence does not define standards for any
particular measurement or disclosure issue.
Conceptual Framework - correct answer ✔✔if there is a conflict with standards and conceptual
framework, which one shall prevail?
3 - correct answer ✔✔levels of financial reporting
WHY - correct answer ✔✔first level
Objective of Financial Reporting - correct answer ✔✔THE WHY/ purpose of accounting
bridge - correct answer ✔✔second level
Qualitative Characteristics of Accounting Information - correct answer ✔✔the bridge between levels 1
and 3
HOW - correct answer ✔✔The third level
recognition measurement and disclosure concepts - correct answer ✔✔the HOW or the implementation
, TRUE - correct answer ✔✔General purpose financial reports do not and cannot provide all of the
information that existing and potential investors, lenders, and other creditors need.
FALSE - correct answer ✔✔General purpose reports meet the needs of individual primary users because
of the difference and sometimes conflicting information needs and desires of such users
FALSE - correct answer ✔✔Financial reports are based NOT on estimates, judgments, and models rather
than exact depictions.
False - correct answer ✔✔General Purpose Financial Reports are designed to show the value of a
reporting entity; but they provide information to the users to estimate the value of the reporting entity
Fundamental
Enchancing - correct answer ✔✔Classification of qualitative characteristics
Enhancing - correct answer ✔✔the usefulness of financial information is ___ if it is comparable,
verifiable, timely, and understandable
fundamental - correct answer ✔✔Financial information is useful when it is relevant and represents
faithfully what if purports to be.
Relevance
Faithful Representation - correct answer ✔✔two fundamental qualities
Predictive Value
Confirmatory Value
Materiality - correct answer ✔✔Ingredients of Relevance
completeness, neutrality, free from error - correct answer ✔✔ingredients of faithful representation
comparability, verifiability, timeliness, understandability - correct answer ✔✔enhancing qualities
Conceptual Framework - correct answer ✔✔Provides a strong theoretical foundation and allows for the
systematic adaptation of accounting standards
Conceptual Framework - correct answer ✔✔Serves as a guide to resolving accounting issues that are not
addressed directly in Philippine Accounting Standards or Philippine Financial Reporting Standards or
Interpretations.
Conceptual Framework - correct answer ✔✔not a standard and hence does not define standards for any
particular measurement or disclosure issue.
Conceptual Framework - correct answer ✔✔if there is a conflict with standards and conceptual
framework, which one shall prevail?
3 - correct answer ✔✔levels of financial reporting
WHY - correct answer ✔✔first level
Objective of Financial Reporting - correct answer ✔✔THE WHY/ purpose of accounting
bridge - correct answer ✔✔second level
Qualitative Characteristics of Accounting Information - correct answer ✔✔the bridge between levels 1
and 3
HOW - correct answer ✔✔The third level
recognition measurement and disclosure concepts - correct answer ✔✔the HOW or the implementation
, TRUE - correct answer ✔✔General purpose financial reports do not and cannot provide all of the
information that existing and potential investors, lenders, and other creditors need.
FALSE - correct answer ✔✔General purpose reports meet the needs of individual primary users because
of the difference and sometimes conflicting information needs and desires of such users
FALSE - correct answer ✔✔Financial reports are based NOT on estimates, judgments, and models rather
than exact depictions.
False - correct answer ✔✔General Purpose Financial Reports are designed to show the value of a
reporting entity; but they provide information to the users to estimate the value of the reporting entity
Fundamental
Enchancing - correct answer ✔✔Classification of qualitative characteristics
Enhancing - correct answer ✔✔the usefulness of financial information is ___ if it is comparable,
verifiable, timely, and understandable
fundamental - correct answer ✔✔Financial information is useful when it is relevant and represents
faithfully what if purports to be.
Relevance
Faithful Representation - correct answer ✔✔two fundamental qualities
Predictive Value
Confirmatory Value
Materiality - correct answer ✔✔Ingredients of Relevance
completeness, neutrality, free from error - correct answer ✔✔ingredients of faithful representation
comparability, verifiability, timeliness, understandability - correct answer ✔✔enhancing qualities
