Phase A of the joint FASB and IASB conceptual
framework project stipulates the desired fundamental and enhancing qualitative
characteristics of accounting information. Several constraints impede achieving
these desired characteristics. Answer each of the following questions related to
these characteristics and constraints.

 

1. 
   Which constraint would allow a company to record
   the purchase of a $120 printer as an expense rather than capitalizing the
   printer as an asset?
2. 
   Donald Kirk, former chairman of the FASB once
   noted that %u201C%u2026there must be public confidence that the standard-setting system
   is credible, that selection of board members is based on merit and not the
   influence of special interests%u2026%u201D Which charachteristic is implicit to Mr.
   Kirk%u2019s statement?
3. 
   Allied Appliances, Inc., changed its revenue
   recognition policies. Which characteristic is jeopardized by this change?
4. 
   National Bancorp, a publicly traded company,
   files quarterly and annual financial statements with the SEC. Which
   characteristic is relevant to the timing of these periodic filings?
5. 
   In general, relevant information possesses which
   qualities?
6. 
   When there is agreement between a measure of
   description and the phenomenon it purports to represent, information possesses
   which characteristic?
7. 
   Jeff Brown is evaluating two companies for
   future investment potential. Jeff%u2019s task is made easier because both companies
   use the same accounting methods when preparing their financial statements.
   Which characteristic does the information Jeff will be using possess?
8. 
   A company should disclose information only if
   the perceived benefits of the disclosure exceed the costs of providing the
   information. Which constraint does this statement describe?