Accounting is a service activity. Its function is to provide quantitative financial information that is intended to be useful in making economic decisions about and for companies. Thus, the accounting function might be viewed primarily as being a tool or device for providing quantitative financial information to management to facilitate decision making.
Statement 2 Financial statements that were developed in accordance with generally accepted accounting principles should be conservative.
Required:
Choose Statement 1 or 2 and prepare a response to the two questions posed. Use your readings from the text and at least one additional academic resource to provide support for your response. The following resources can be used along with any others that are considered authoritative on the subject:
• FASB Codification
• AICPA website
• IASB website
Evaluate each of the preceding numbered statements as follows:
List the fallacies, half-truths, circular reasoning, erroneous comments or conclusions, and/or inconsistencies. Explain by what authority and/or on what basis each item listed can be considered to be fallacious, circular, inconsistent, a half-truth, or an erroneous comment or conclusion.
If the statement or a portion of it is merely out of context, indicate the context(s) in which the statement would be correct.