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Business Finance

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In your textbook, read Case C2-14: Inconsistent Statements on Accounting Principles. 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:

Below is the case:

Inconsistent Statements on Accounting Principles

LO 2.2 LO 2.5 AICPA Adapted The following two statements have been taken directly or with some modification from the accounting literature. Each of them is either taken out of context, involves circular reasoning, and/or contains one or more fallacies, half-truths, erroneous comments, conclusions, or inconsistencies (internally or with generally accepted principles or practices).

Statement 1 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:

Evaluate each of the preceding numbered statements as follows:

  1. List the fallacies, half-truths, circular reasoning, erroneous comments or conclusions, and/or inconsistencies.
  2. 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.

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Explanation & Answer

Please find attached. Let me know if you need edits.

Outline

Introduction
Body
Conclusion
References


Running head: DISCUSSION POST

Discussion Post
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DISCUSSION POST
Statement One Evaluation
The first statement under evaluation depicts that accounting is a service activity and that
the function of accounting is to provide quantitative financial information which is aimed at
making economic resolutions regarding the corporations. Therefore the accounting function is
presumed to be a tool or a particular device for offering quantitative information to management
in order to facilitate the practice or the aspect of making decisions and resolutions. One of the
half-truths underlying the aforementioned principle is that accounting cannot be embraced as a
tool for providing quantitative information. Instead, it should be presumed to a qualitative tool
that provides information (Wahlen, Jones and Pagach, 2017). Another half-truth underlying the
statement is whereby the statement eludes that accounting is a service activity. Such a
postulation depicts a half-truth since accounting is defined as the process of incepting the
financial statements.
The process should be continuous and it should present information which is true and of

fair v...


Anonymous
Really great stuff, couldn't ask for more.

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