Question

Here are some fundamental and enhancing qualitative characteristics of useful financial information:

1. Comparability

2. Completeness

3. Confirmatory value

4. Faithful representation

5. Freedom from error

6. Materiality

7. Neutrality

8. Predictive value

9. Relevance

10. Timeliness

11. Understandability

12. Verifiability

Match each characteristic to one of the following statements.

(a)

- Accounting information cannot be selected, prepared, or presented to favor one set of interested users over another.

(b)

- Accounting information must be available to decision makers before it loses its ability to influence their decisions.

(c)

- Accounting information is prepared on the assumption that users have a reasonable understanding of accounting and general business and economic conditions.

(d)

- Accounting information provides a basis to evaluate a previously made decision.

(e)

- Accounting information includes everything it needs to and nothing important is omitted. This is an important component of faithful representation.

(f)

- Accounting information helps users make predictions about the outcome of past, present, and future events.

(g)

- Accounting information about one company can be evaluated against the accounting information from another company.

(h)

- Accounting information is included if its omission or misstatement could influence the economic decisions of users. This is an important component of relevance.

(i)

- All the accounting information that is necessary to faithfully represent economic reality is included.

(j)

- Accounting information can be determined to be free of material error.

(k)

- Accounting information is included if it will make a difference in users' decisions.

(I)

- Accounting information about a company can be confirmed by two or more users to be a faithful representation.

Answer 1

A) Neutrality

B) Timeliness                

C)  Understandability

D) Confirmatory Value

E) Completeness

F) Predictive Value

G) Comparability

H) Materiality

I) Faithful Representation

J) Freedom from error

K) Relevance

L) Verifiability