Select the statement below that correctly describes the qualitative characteristic of comparability.
A)Information is reasonably free of error and bias to be comparable.
B)Financial data is presented in such a manner that it can be meaningfully compared with the same data for other companies.
C)Financial results of one period should closely resemble the financial results of a previous period.
D)The financial reports reflect what really happened during a time period.

Question

Quizplus · Accepted Answer

Comparability refers to the ability to compare financial information across different companies or periods. Option B correctly describes comparability as financial data being presented in a manner that allows for meaningful comparison with similar data from other companies. Option A describes the qualitative characteristic of accuracy, option C describes consistency, and option D describes the qualitative characteristic of faithful representation.

Select the Statement Below That Correctly Describes the Qualitative Characteristic