Define the management assertions of: existence or occurrence, completeness, rights and obligations, valuation or allocation, presentation and disclosure


The existence or occurrence assertion affirms that all assets and equities contained in the balance sheet exist and that all transactions in the income statement actually occurred.

The completeness assertion declares that no material assets, equities, or transactions have been omitted from the financial statements.
The rights and obligations assertion maintains that assets appearing on the balance sheet are owned by the entity and that the liabilities reported are obligations.

The valuation or allocation assertion states that assets and equities are valued in accordance with generally accepted accounting principles and that allocated amounts such as depreciation expense are calculated on a systematic and rational basis.

The presentation and disclosure assertion alleges that financial statement items are correctly classified (e.g.; long term liabilities will not mature within one year) and that footnote disclosures are adequate to avoid misleading the users of financial statements.

Business

You might also like to view...

The annual dividend amount divided by the annual net income is ________________________

Fill in the blank(s) with correct word

Business

To appoint a proxy, the Model Business Corporation Act (MBCA) requires:

A. the board of directors to acknowledge the proxy. B. a vote of approval from other shareholders. C. a court order. D. a written document.

Business

Merchandisers usually take a physical inventory when the volume of goods is at its lowest levels

Indicate whether the statement is true or false

Business

Which of the following is correct regarding the provisions of IAS No. 8 on accounting changes and error corrections?

a. IAS No. 8 requires that correction of an error be made only by restatement of all prior periods presented. b. IAS No. 8 requires correction of an error to be made only by reflecting the effect of the correction in income of the period in which the error was discovered without restating previously reported results. c. IAS No. 8 allows correction of an error to be made either through restatement of all period periods presented or by reflecting the effect of the correction in income of the period in which the error was discovered without restating previously reported results. d. IAS No. 8 reflects a preference for not restating prior results in reporting accounting changes and error corrections.

Business