INTERMEDIATE FINANCIAL REPORTING 1
UNIT 1 — TASK-BASED SIMULATION #3
Task 1
Using the email from Gurpreet in the Appendix, complete the requested memo on
qualitative characteristics of useful financial statements.
Instructions:
· The next four paragraphs end in a sentence that is bolded. You must decide how
to best complete the sentence: you may leave the bolded comment in place
(choose option 1) or replace it with an alternative comment.
To: Gurpreet Rahad
From: Annette Qupee
Re: Qualitative characteristics of financial statements and suggested improvements to
the financial statement close process
The objective of general-purpose financial reporting is to provide financial information
about the reporting entity that is useful to existing and potential investors, lenders, and
other creditors, in making decisions about providing resources to the entity.
For information to be useful, it must be relevant and faithfully represent the nature of
the underlying transaction. Relevance means that the financial information provided…
accurately reflects the transactions undertaken by the entity.
Select your answer 1
Options:
1 accurately reflects the transactions undertaken by the entity.
2 is capable of making a difference in users’ decisions.
3 is in a form that is understandable by users.
4 is prepared under the going concern assumption.
5 reports the economic events as they actually occurred.
UNIT 1 — TASK-BASED SIMULATION #3
Task 1
Using the email from Gurpreet in the Appendix, complete the requested memo on
qualitative characteristics of useful financial statements.
Instructions:
· The next four paragraphs end in a sentence that is bolded. You must decide how
to best complete the sentence: you may leave the bolded comment in place
(choose option 1) or replace it with an alternative comment.
To: Gurpreet Rahad
From: Annette Qupee
Re: Qualitative characteristics of financial statements and suggested improvements to
the financial statement close process
The objective of general-purpose financial reporting is to provide financial information
about the reporting entity that is useful to existing and potential investors, lenders, and
other creditors, in making decisions about providing resources to the entity.
For information to be useful, it must be relevant and faithfully represent the nature of
the underlying transaction. Relevance means that the financial information provided…
accurately reflects the transactions undertaken by the entity.
Select your answer 1
Options:
1 accurately reflects the transactions undertaken by the entity.
2 is capable of making a difference in users’ decisions.
3 is in a form that is understandable by users.
4 is prepared under the going concern assumption.
5 reports the economic events as they actually occurred.
