Trade-offs between the characteristics that make information useful may be necessary or beneficial. Issuance of interim financial statements is an example of a trade-off between
A) relevance and faithful representation.
B) faithful representation and periodicity.
C) timeliness and materiality.
D) understandability and timeliness.

Question

Quizplus · Accepted Answer

Interim financial statements prioritize timeliness to provide relevant, current information to users, which may compromise some aspects of faithful representation, such as completeness and accuracy, due to the shorter reporting period and quicker preparation time.

Trade-Offs Between the Characteristics That Make Information Useful May Be