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Match the Descriptions by Entering the Proper Letter in the Space

Question 80

Matching

Match the descriptions by entering the proper letter in the space provided with the qualitative characteristics of accounting information.

Premises:

Responses:

This qualitative characteristic means that accounting information is capable of making a difference in a decision by the report user.

Comparability

This qualitative characteristic is indicated when independent measurers obtain similar results.

Reliability

Often referred to as objectivity; it is the idea that the financial statements are not prepared in a way to favor one group of users (management, owners, creditors, employees, etc.)over other groups.

Timeliness

Information that helps the statement user confirm fulfillment or no fulfillment of prior expectations or decisions is said to have this qualitative characteristic.

Representational faithfulness

This is the concept that data shown in the financial reports reflect what really happened.

Consistency

Information that is presented soon enough after events are reported to be useful in decision making would meet this qualitative characteristic.

Relevance

When the financial data is presented in such a manner that it can be meaningfully compared with the same data for other companies, it meets this qualitative characteristic.financial data is presented in such a manner that it can be meaningfully compared with the same data for other companies, it meets this qualitative characteristic.

Predictive value

This qualitative characteristic means simply that the information should be dependable; such information is verifiable, is a faithful representation of the company's financial affairs, and is reasonably free of error and bias.

Feedback value

If information is relevant, it will have this qualitative characteristic and enable statement users in making predictions about the meaning and ultimate outcome of events giving rise to the information.

Neutrality

If an entity uses the same accounting treatment for similar events and data from period to period, this qualitative characteristic is being met.

Verifiability

Premises:

This qualitative characteristic means that accounting information is capable of making a difference in a decision by the report user.

This qualitative characteristic is indicated when independent measurers obtain similar results.

Often referred to as objectivity; it is the idea that the financial statements are not prepared in a way to favor one group of users (management, owners, creditors, employees, etc.)over other groups.

Information that helps the statement user confirm fulfillment or no fulfillment of prior expectations or decisions is said to have this qualitative characteristic.

This is the concept that data shown in the financial reports reflect what really happened.

Information that is presented soon enough after events are reported to be useful in decision making would meet this qualitative characteristic.

If an entity uses the same accounting treatment for similar events and data from period to period, this qualitative characteristic is being met.

Responses:

Comparability

Reliability

Timeliness

Representational faithfulness

Consistency

Relevance

Predictive value

Feedback value

Neutrality

Verifiability

Correct Answer:

Premises:

Responses:

This qualitative characteristic means that accounting information is capable of making a difference in a decision by the report user.

This qualitative characteristic is indicated when independent measurers obtain similar results.

Often referred to as objectivity; it is the idea that the financial statements are not prepared in a way to favor one group of users (management, owners, creditors, employees, etc.)over other groups.

Information that helps the statement user confirm fulfillment or no fulfillment of prior expectations or decisions is said to have this qualitative characteristic.

This is the concept that data shown in the financial reports reflect what really happened.

Information that is presented soon enough after events are reported to be useful in decision making would meet this qualitative characteristic.

If an entity uses the same accounting treatment for similar events and data from period to period, this qualitative characteristic is being met.