New 55% Off on All Courses - Enroll Now! Click Here

    Question

    Which of the following is not a qualitative

    characteristic of accounting information?
    A Relevance Correct Answer Incorrect Answer
    B Reliability Correct Answer Incorrect Answer
    C Comparability Correct Answer Incorrect Answer
    D Accountability Correct Answer Incorrect Answer
    E Understandability Correct Answer Incorrect Answer

    Solution

    The demand for accounting information by investors,lenders , creditors, etc., creates fundamental qualitative characteristics that are desirable in accounting information. There are six qualitative characteristics of accounting information: · Relevance – how helpful the information is for financial decision-making processes· Representational faithfulness or Reliability - the extent to which information accurately reflects a company’s financials· Verifiability - the extent to which information is reproducible given the same data and assumptions· Timeliness - how quickly information is available to users of accounting information· Understandability - the degree to which information is easily understood· Comparability - the degree to which accounting standards and policies are consistently applied from one period to another

    Practice Next