Question

Identify which specific qualitative characteristic of accounting information is best described in each item below

A) The annual financial reports of Treelivingo Corp. are audited by public accountants

B) Able Corp. and Mona Inc. both use the straight-line depreciation method.

C) Global Corp. issues its quarterly reports within five days after each quarter ends

D) Filipo Inc. segregates information that relates to one of its two subsidiaries, which was disposed of in the year but was included in its consolidated
statements for prior years

E) The CFO of WebDesign stresses that factual, truthful, unbiased information is the overriding consideration when preparing WebDesign’s financial information

F) EB Energy Inc. realizes that financial information may be misrepresented or misinterpreted if all pertinent information is not included

G) Wright Industries exercises due care and professional judgement in developing all estimates and assumptions used to prepare its financial information

Answer 1

	Answer	Explanation
A) The annual financial reports of Treelivingo Corp. are audited by public accountants	Verifiability	Auditing of financial reports represents the verifiability of accounting informations
B) Able Corp. and Mona Inc. both use the straight-line depreciation method.	Comparability	Comparing accounting information between two entities represents comparability
C) Global Corp. issues its quarterly reports within five days after each quarter ends	Timeliness	The timing & status to prepare & issue the financials statement represents timeliness
D) Filipo Inc. segregates information that relates to one of its two subsidiaries, which was disposed of in the year but was included in its consolidated	Comparability	Stating of facts which helps in comparing accounting information over time represents comparability
E) The CFO of WebDesign stresses that factual, truthful, unbiased information is the overriding consideration when preparing WebDesign’s financial information	Neutrality	Facts stating that the financial statements are free from bias represents neutrality
F) EB Energy Inc. realizes that financial information may be misrepresented or misinterpreted if all pertinent information is not included	Completeness	Not excluding any relevant information from financial statement represents completeness
G) Wright Industries exercises due care and professional judgement in developing all estimates and assumptions used to prepare its financial information	Freedom from material error	Considering due care and professional judgement for estimates & assumptions while preparing financial statement represents freedom from material error.