FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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E2-2 (Qualitative Characteristics) The qualitative characteristics that make accounting information
useful for decision-making purposes are as follows.
Representational faithfulness
Comparability
Consistency
Relevance
Timeliness
Verifiability
Neutrality
Reliability
Predictive value
Feedback value
Instructions
Identify the appropriate qualitative characteristic(s) to be used given the information provided below.
(a) Qualitative characteristic being employed when companies in the same industry are using the
same accounting principles.
(b) Quality of information that confirms users' earlier expectations.
(c) Imperative for providing comparisons of a firm from period to period.
(d) Ignores the economic consequences of a standard or rule.
(e) Requires a high degree of consensus among individuals on a given measurement.
(f) Predictive value is an ingredient of this primary quality of information.
(g) Two qualitative characteristics that are related to both relevance and reliability.
(h) Neutrality is an ingredient of this primary quality of accounting information.
(i)
Two primary qualities that make accounting information useful for decision-making purposes.
(j)
Issuance of interim reports is an example of what primary ingredient of relevance?
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Transcribed Image Text:E2-2 (Qualitative Characteristics) The qualitative characteristics that make accounting information useful for decision-making purposes are as follows. Representational faithfulness Comparability Consistency Relevance Timeliness Verifiability Neutrality Reliability Predictive value Feedback value Instructions Identify the appropriate qualitative characteristic(s) to be used given the information provided below. (a) Qualitative characteristic being employed when companies in the same industry are using the same accounting principles. (b) Quality of information that confirms users' earlier expectations. (c) Imperative for providing comparisons of a firm from period to period. (d) Ignores the economic consequences of a standard or rule. (e) Requires a high degree of consensus among individuals on a given measurement. (f) Predictive value is an ingredient of this primary quality of information. (g) Two qualitative characteristics that are related to both relevance and reliability. (h) Neutrality is an ingredient of this primary quality of accounting information. (i) Two primary qualities that make accounting information useful for decision-making purposes. (j) Issuance of interim reports is an example of what primary ingredient of relevance?
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