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    Question

    Two primary qualitative characteristics of financial

    statements are
    A Understandability and materiality. Correct Answer Incorrect Answer
    B Neutrality and understandability. Correct Answer Incorrect Answer
    C Relevance and reliability. Correct Answer Incorrect Answer
    D Comparability and consistency Correct Answer Incorrect Answer
    E Timeliness and completeness Correct Answer Incorrect Answer

    Solution

    Relevance means that the information presented in the financial statements is useful and pertinent to the users' decision-making needs. It should have predictive value, confirmatory value, or both. Reliability means that the information in the financial statements is accurate and trustworthy. It is free from errors, bias, or misrepresentation, and is verifiable through independent sources.

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