Question

*true or false*: a conceptual framework underlying financial accounting is necessary because future accounting practice problems can be solved by reference to the concepts framework and a formal standard-setting body will not be necessary

Answer 1

A conceptual framework underlying financial accounting is necessary because it provides a foundation for accounting standards and ensures consistency and comparability of financial information.

Step-by-step explanation:

True. A conceptual framework underlying financial accounting is necessary because it provides a framework of concepts and principles that guide the preparation and presentation of financial statements. It helps ensure consistency, comparability, and relevance of financial information. While a formal standard-setting body, such as the Financial Accounting Standards Board (FASB), does establish accounting standards, having a conceptual framework is still necessary as it provides a foundation for those standards.