Chapter 1
Recognition and Measurement
4
AS-9 (
2
)
The financial statements of Borg Ltd. show a loan payable of $200,000 at the end of the
year with no notes on repayment terms or interest charged. Which fundamental qualitative
characteristic does this information lack?
AS-10 (
2
)
What principle ensures completeness of financial information?
AS-11 (
2
)
Mike Grump, the CEO of Kaizen Chiefs Inc., instructed the accounting team to defer the
recognition of additional revenue earned in the year until the next fiscal year because he has
already met his sales targets (which entitle him to receive his bonus). Which fundamental
qualitative characteristic will the financial statements lack? Explain.
