The simplification of complex transactions in external financial reports without sacrificing relevance or faithful representation promotes the qualitative characteristic of:
A) timeliness.
B) relevance.
C) materiality.
D) understandability.

Question

Quizplus · Accepted Answer

The simplification of complex transactions in external financial reports promotes the qualitative characteristic of understandability, which means information should be comprehensible to users with reasonable knowledge of business and economic activities. Choice A (timeliness) and C (materiality) do not relate to the given scenario. While choice B (relevance) is important, it is not the best choice as relevance does not specifically address the simplification of complex transactions in financial reports.

The Simplification of Complex Transactions in External Financial Reports Without