Which of the following qualitative characteristics make financial statement information useful relevance understandability reliability all of the above?
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Page | 1 Problem 3-1 (IAA) 1.What are the attributes that make the information provided in the financial statements useful to the readers? a.Qualitative characteristics of financial information b. Quantitative characteristics of financial information c.Elements of financial statements d.Objectives of financial reporting 2.Qualitative Characteristics a. are considered either fundamental or enhancing. b.contribute to the decision-usefulness of financial reporting information. c.distinguish better information from inferior information for decision-making purposes. d.All of the choices are correct. 3.The fundamental qualitative characteristics are a.Relevance and faithful representation b.Relevance, faithful representation and materiality c.Relevance and reliability d.Faithful representation and materiality 4.Accounting information is considered relevant when it a.Can be depended on to represent the economic conditions and events that is intended to represent. b.Is capable of making a difference in a decision. c.Is understandable by reasonably informed users of accounting information. d.Is verifiable and neutral. 5.The ingredients of relevant financial information are a.Predictive value and confirmatory value b.Predictive value, confirmatory value and timeliness c.Predictive value, confirmatory value and materiality d.Predictive value, confirmatory value, timeliness and materiality 6.What is the quality of information that gives assurance that is reasonably free of error and bias? a.Relevance b.Faithful representation c.Verifiability d.Neutrality 7.Which of the following is the best description of “faithful representation” in relation to information in financial statements? a.Influence on the economic decision of users b.Inclusion of a degree of caution c.Freedom from material error d.Comprehensibility to users 8.To achieve faithful representation, the financial statements a.Must have predictive and confirmatory value. b.Must be complete, neutral and reasonably free from error. c.Are understandable, comparable, verifiable and timely. d.Must possess all of these. 9.The financial accounting information is directed toward the common needs of users and is independent of presumptions about particular needs and desires of specific users. a.Relevance b.Verifiability c.Neutrality d.Completeness 10. In the event of conflict between the economic substance of a transaction and the legal form, the economic substance shall prevail. a.Form over substance b.Substance over form c.Relevance d.Completeness Problem 3-2 (IAA) 1. The enhancing qualitative characteristics of financial information are a.Comparability and understandability b.Verifiability and timeliness c.Comparability, understandability and verifiability d.Comparability, understandability, verifiability and timeliness 2.Financial information exhibits consistency when a. Accounting procedures are adopted which smooth net income and make results consistent between years. b.Gains and losses are shown separately on the income statement. c.Accounting entities give similar events the same accounting treatment each period. d.Expenditures are reported as expenses. 3.When information about two different entities engaged in the same industry has been prepared and presented in similar manner, the information exhibits the enhancing qualitative characteristic of a.Relevance b.Faithful representation c.Consistency d.Comparability 4.The characteristic that is demonstrated when a high degree of consensus can be secured among independent measures using the same measurement method is a.Relevance b.Understandability c.Verifiability d. Neutrality Why is this page out of focus?This is a Premium document. Become Premium to read the whole document. What are the qualitative characteristics of useful accounting information?There are six different types of qualitative characteristics of accounting information, including:. Relevance. ... . Representational faithfulness. ... . Verifiability. ... . Understandability. ... . Comparability. ... . Timeliness. ... . Extract relevant information. ... . Check your information.. Which of the following characteristics are needed in order for financial information to be useful?What makes a financial statement useful? FASB (Financial Accounting Standards Board) lists six qualitative characteristics that determine the quality of financial information: Relevance, Faithful Representation, Comparability, Verifiability, Timeliness, and Understandability.
Which of the following are the two types of qualitative characteristics of useful information?Fundamental Characteristics distinguish useful financial reporting information from that is not useful or misleading. The two fundamental Qualitative characteristics are : Relevance. Faithful Representation.
What are the quantitative characteristics of financial statements?Quantitative Characteristics of Financial Statements
Quantitative financial data include numbers you can measure, such as revenue, expenses, profit margins and taxes. You can break down these numbers to further quantify areas of your financial performance.
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