Exercise 1-3: True or False- Theory 1. The Conceptual Framework is not a PFRS and hence does not define standards for any particular measurement or disclosure issue. 2. The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity. 3. Financial statements provide all the information that existing and potential investors, lenders and other creditors need. 4. Financial statements show the value of a reporting entity. 5. Focusing on common information needs does not prevent the reporting entity from including additional information that is most useful to a particular subset of primary users. 6. Accrual accounting recognizes the effects of transactions and other events and circumstances on a reporting entity's economic resources and claims in the periods in which those effects occur, even if the resulting cash receipts and payments occur in a different period. 7. If financial information is to be useful, it must be relevant and faithfully represent what it intends to represent. 8. The usefulness of financial information is enhanced if it is comparable, verifiable, timely, and understandable. 9. The fundamental qualitative characteristics of useful financial information are relevance and timeliness. 10. Faithful representation does not mean accurate in all respects.