Relevant and faithful representation of accounting data is enhanced when financial reports are clear and concise. Such reports demonstrate
A) timeliness
B) understandability
C) comparability
D) verifiability

Question

Quizplus · Accepted Answer

Clear and concise financial reports enhance the understandability of accounting data. Timeliness refers to the information being available in a timely manner, comparability refers to the ability to compare financial information over time, and verifiability refers to the ability to confirm the accuracy of reported information. While all of these are important in relevant and faithful representation, the clearest and most concise report is the one that is most likely to be understood accurately by users.

Relevant and Faithful Representation of Accounting Data Is Enhanced When