If an investor can use accounting information for two different companies to evaluate the types and amounts of expenses, the information is said to have the quality of
A)comparability.
B)consistency.
C)neutrality.
D)materiality.

Question

Quizplus · Accepted Answer

Comparability refers to the ability to compare financial information between different companies or periods of time. In this case, the investor is able to compare expenses between two different companies using accounting information, indicating that the information has comparability quality. Consistency refers to the use of the same accounting methods and principles over time, neutrality refers to the absence of bias in financial reporting, and materiality refers to the significance of an item on the financial statements. While these qualities are important in financial reporting, they are not relevant to the ability to compare information between different companies.

If an Investor Can Use Accounting Information for Two Different