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)understandability.

Question

Quizplus · Accepted Answer

Comparability is a quality of accounting information that allows users to compare financial statements of different companies or time periods. In this scenario, the investor is using accounting information of two different companies to evaluate their expenses, which requires comparability. Consistency refers to the application of accounting policies and methods consistently over time, neutrality refers to the absence of bias in financial reporting, and understandability refers to the degree to which information is comprehensible to users with a reasonable knowledge of business and economic activities. While these qualities may also be desirable in accounting information, they are not directly relevant to the scenario described in the question.

If an Investor Can Use Accounting Information for Two Different