The concept that states that financial reports should be comprehensible to people who are reasonably perceptive about business and economic activities and are willing to study the information with reasonable diligence is
A) understandability.
B) relevance.
C) reliability.
D) materiality.
E) comparability.

Question

Quizplus · Accepted Answer

Understandability is the concept that financial reports should be clear and easy to comprehend for users who have a reasonable knowledge of business and economic activities and are willing to spend the necessary time to understand the information.

The Concept That States That Financial Reports Should Be Comprehensible