Question

1.) Under Statement of Financial Accounting Concepts No. 8, which of the following relates to both relevance and faithful representation?

A.)Materiality

B.) Neutrality

C.) Timeliness

D.) Predictive value

2.)

An item is considered material if:

		The cost of reporting the item is greater than its benefits
		It doesn’t cost a lot of money.
		it is of a tangible good.

Answer 1

Ans 1

Timeliness

Reason:-

Timeliness linked with relevance because all relevant information should be timely recorded.

In other words, faith representation also means reliability. And reliability comes after all the information recorded at the right time

Ans 2

its size is likely to influence the decision of an investor or creditor

Reason:-

Investors and creditors are prominent stakeholders in the organization. Therefore, the amount which can influence their decision is material.

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