Chapter 1
Recognition and Measurement
3
AS-6 (
2
)
Your financial advisor has just informed you that the firm you are considering to purchase
shares from reported an exceptionally good net income seven years ago. What characteristic
is this information is lacking?
AS-7 (
2
)
The bookkeeper of Minco Inc., which is a large multinational company, forgot to record a $25
parking expense, which was incurred on the last day of the company’s fiscal year end. The
statements were approved and issued to the public. Is this omission material? Explain.
AS-8 (
2
)
Information is faithfully represented in the financial statements when which three
characteristics are present?
