CMA Intermediate · Corporate Accounting and Auditing · Conceptual Framework
The Conceptual Framework states that the qualitative characteristics of useful financial information flow logically from which foundation?
The qualitative characteristics flow from the objective of general purpose financial reporting. This objective is the foundation of the Conceptual Framework, and the other aspects, including the characteristics and the cost constraint, the reporting entity concept, elements, recognition and measurement, all derive logically from it.
- AThe elements of financial statements
- BThe objective of general purpose financial reportingCorrect
- CThe measurement bases chosen by management
- DThe reporting entity concept
Explanation
Paragraph 1.1 says the objective of general purpose financial reporting forms the foundation, and other aspects, including the qualitative characteristics and cost constraint, flow logically from it. The other options are themselves aspects that flow from the objective.
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