Answer
a.Relevance. The component of relevance that aids in the confirmation or rectification of prior expectations in confirmatory value.
b.The most pervasive constraint that governs the boundaries of financial reporting is the cost constraint.
c. Relevance would ensure that there is no undermining of the financial system by ensuring that the information prepared is material and satisfies both predictive and confirmatory roles.
d.Muruyama Corp is not following the principle of consistency, which is a predominant form of comparability. The corporation treats inventory using varying valuation methods.
e.The deferring of losses means that neutrality is lacking in the financial reports. The information regarding losses is material; thus, it should be included in financial reports for them to be complete.
f.i. Relevance. ii. Faithful representation
g.Timeliness. The reports relating to the first quarter were issued at a time when they would not be valuable for making economic determinations.
h.Predictive value falls under the quality of relevance.
i.Comparability. Being the only company that utilizes straight-line depreciation, Roddick Company’s plant assets cannot be compared with those of other companies in the industry.
j.Verifiability. The middle values that the president settles on cannot be verified by other appraisers.
Work Step by Step
N/A
