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Learning Objective $01-07$ Identify the objective and qualitative characteristics of financial reporting information and the elements of financial statements.

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The objective of financial reporting is to provide useful financial information to capital providers. The primary decision$-$specific qualities that make financial information useful are relevance and faithful representation. To be relevant, information must possess predictive value and$/$or confirmatory value, and all material information should be included. Completeness, neutrality, and freedom from error enhance faithful representation. The $10$ elements of financial statements are assets, liabilities, equity, investments by owners, distributions to owners, revenues, expenses, gains, losses, and comprehensive income.

Elements of Financial Statements

Knowledge Check $01$

Match the term and the definition