Indicate the qualitative characteristic of financial information
being described in each item below:
(a) |
Financial statements should include all information necessary to portray the underlying transactions. |
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(b) |
Financial information should make a difference in a user’s decision-making. |
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(c) |
Financial information should not favour one user or stakeholder over another. |
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(d) |
Financial information should reflect the economic substance of business events or transactions. |
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(e) |
Financial information should help users assess the impact of past, present, or future events. |
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(f) |
Financial information must be reliable and without errors or omissions. |
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(g) |
Financial information should help users confirm or correct their previous expectations. |
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(h) |
Financial information should be reported and measured in a similar way within a company and between different companies. |
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(i) |
Financial information should be of sufficient quality and clarity to permit reasonably informed users to assess the information’s significance. |
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(j) |
Financial information should be available to users before it loses its ability to be decision-useful. |
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(k) |
Knowledgeable, independent users should be able to achieve similar results and consensus when accounting for a particular financial t |
Select the qualitative characteristic for each question from following
Relevance
Representational
faithfulness
Completeness
Neutrality
Predictive value
Freedom from material error
Feedback value
Comparability
Understandability
Timeliness
Verifiability
(a) Completeness- Financial statements should include all information necessary to portray the underlying transactions.
(b) Relevance- Financial information should make a difference in a user’s decision-making.
(c) Neutrality- Financial information should not favour one user or stakeholder over another.
(d) Representational Faithfulness- Financial information should reflect the economic substance of business events or transactions.
(e) Predictive Value- Financial information should help users assess the impact of past, present, or future events.
(f) Freedom from material error- Financial information must be reliable and without errors or omissions.
(g) Feedback Value- Financial information should help users confirm or correct their previous expectations.
(h) Comparability- Financial information should be reported and measured in a similar way within a company and between different companies.
(i) Understandibility- Financial information should be of sufficient quality and clarity to permit reasonably informed users to assess the information’s significance.
(j) Timeliness- Financial information should be available to users before it loses its ability to be decision-useful.
(k) Verifiability- Knowledgeable, independent users should be able to achieve similar results and consensus when accounting for a particular financial transaction.
Indicate the qualitative characteristic of financial information being described in each item below: (a) Financial statements...
The following is a list of qualitative characteristics of useful accounting information identified in the FASB's and the IASB's Statement of Financial Accounting Concepts No. 8 and statements describing the qualities. A. Comparability B. Decision usefulness C. Relevance D. Faithful representation E. Predictive value F. Confirmatory value G. Verifiability H. Neutrality I. Free from error J. Consistency K. Materiality L. Timeliness M. Understandability N. Completeness Required: Select the appropriate letter identifying each quality on the statement describing the quality. 1....
VISINI quamative characterist is nur present? E2.3 (LO2) video (Qualitative Characteristics) The qualitative characteristics that make accounting information useful include: Relevance Neutrality Representational faithfulness Verifiability Completeness Understandability Freedom from crror Timeliness Comparability Feedback value Consistency Predictive value Instructions Identify the appropriate qualitative characteristic(s) to be used given the information provided below. a. The qualitative characteristic being employed when companies in the same industry are using the same accounting policies. b. Quality of information that confirms users' earlier expectations. c. Necessary...
E2.2 (LO 2,5) (Qualitative Characteristics) The conceptual framework identifies the fundamental and enhancing qualitative characteristics that make accounting information useful. Instructions Answer the following questions related to these qualitative characteristics. a. Which quality of financial information makes it possible for users to confirm or correct prior expectations? b. Identify some of the trade-offs and constraints in financial reporting. c. The U.S. Securities and Exchange Commission chairman once noted that, if it becomes accepted or expected that accounting principles are determined...
Matching (10% . each 2%) Match the qualitative characteristics below with the following statements (Each qualitative characteristic can use more than one time) A. Timeliness F. Predictive value B. Completeness G. Neutrality C. Free from crror H. Confirmatory value D. Understandability I. Verifiability E. Comparability J. Materiality 1. 2. An item is not reported because its effect on income would not change a decision Information about an economic phenomenon that changes past or present expectations based on previous evaluations. Issuance...
The conceptual framework identifies the fundamental and enhancing qualitative characteristics that make accounting information useful. Answer the following questions related to these qualitative characteristics. Choices for qualitative characteristic are: Feedback value, Freedom from material error or completeness , Comparability, Verifiability, Neutrality ,Understandability, Timeliness, Relevance, Predictive Value, Representation Faithfulness (a) Which quality of financial information makes it possible for users to confirm or correct prior expectations? select a qualitative characteristic (c) The U.S. Securities and Exchange Commission chairman once noted...
Here are some fundamental and enhancing qualitative characteristics of useful financial information:1. Comparability2. Completeness3. Confirmatory value4. Faithful representation5. Freedom from error6. Materiality7. Neutrality8. Predictive value9. Relevance10. Timeliness11. Understandability12. VerifiabilityMatch 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...
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Matching (10% . each 2%) Match the qualitative characteristics below with the following statements (Each qualitative characteristic can use more than one time) A. Timeliness F. Predictive value B. Completeness G. Neutrality C. Free from crror H. Confirmatory value D. Understandability I. Verifiability E. Comparability J. Materiality 1. 2. An item is not reported because its effect on income would not change a decision Information about an economic phenomenon that changes past...
Exercise 2-35 Qualitative Characteristics Listed below are the fundamental and enhancing qualitative characteristics that make accounting information useful. • Relevance • Faithful representation • Comparability • Verifiability • Timeliness • Understandability Required: 1. Match the appropriate qualitative characteristic with the statements below (items can be used more than once). a. When information is provided before it loses its ability to influence decisions, it has this characteristic. b. When several accountants can agree on the measurement of an activity, the information...
LO 1 Qualitative Characteristics and Accounting Conventions E2A. CONCEPT Each of the statements that follow violates one or more accounting con- cepts. State which of these selected qualitative characteristics and accounting conventions- relevance, faithful representation, comparability, verifiability, timeliness, understandability, cost constraint, consistency, materiality, conservatism, or full disclosure-is (are) violated. 1. A company changes its method of accounting for depreciation. 2. The asset account for a pickup truck still used in the business is written down to what the truck could...
6. Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the Select one: a. relevance characteristic b. comparability characteristic c. economic entity d. neutrality characteristic 7. Measurement uncertainty can affect.... Select one: a, relevance characteristic b. faithful representation and relevance characteristic c. understandability characteristic d. faithful representation characteristic 8. Erin Company applies the same accounting treatment to similar events from period to period. Erin Company is exhibiting which of the following qualities as described by...