answer no 2 the relevance and understanability Accounting information provides useful information about business transactions and events. Those whoprovide and use financial reports must often select and evaluate accounting alternatives. The ConceptualFramework examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process maynecessitate trade-offs or sacrifices among the characteristics of useful information.Instructions1. Describe briefly the following characteristics of useful accounting information.1. Relevance.42. Faithful representation.3. Understandability4. Comparability (consistency).5. Neutrality.2. For each of the following pairs of information characteristics, give an example of a situation in whichone of the characteristics may be sacrificed in return for a gain in the other.1. Relevance and faithful representation.7.8.2. Relevance and consistency.3. Comparability and consistency.4. Relevance and understandability6.1011

SOLUTION- UNDERSTANDABILITY IS THE CONCEPT OF FINANCIAL INFORMATION SHOULD BE PRESENTED SO THAT A…

Answered: Accounting information provides useful…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter1: Accounting As A Tool For Managers

Section: Chapter Questions

Problem 1EA: Indicate whether each statement describes financial accounting or managerial accounting. The...

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Which of the following is considered a constraint on useful information by Statement of Financial Accounting Concepts No. 8? a. benefits costs b. conservatism c. timeliness d. verifiability
Indicate whether each statement describes financial accounting or managerial accounting. The information is directed at external users who are making decisions pertaining to investing, extending credit, and other decisions. The principal users are the organizations managers. The key focus is on the entity as a whole. The rules and principles are very flexible. The information gathered is usually available after an independent audit has been completed.
Accounting information provides useful information about business transactions and events. Those who provide and use financial reports must often select and evaluate accounting alternatives. The Conceptual Framework examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade-offs or sacrifices among the characteristics of useful information. Instructions a. Describe briefly the following characteristics of useful accounting information. 1. Relevance. 2. Faithful representation. 3. Understandability. 4. Comparability (consistency). 5. Neutrality. b. b. For each of the following pairs of information characteristics, give an example of a situation in which one of the characteristics may be sacrificed in return for a gain in the other. 1. Relevance and faithful representation. 2. Relevance and consistency. 3. Comparability and consistency.…
Accounting information provides useful information about business transactions and events. Those who provide and use financial reports must often select and evaluate accounting alternatives. The FASB statement on qualitative characteristics of accounting information examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade-offs or sacrifices among the characteristics of useful information. Instructions a. Describe briefly the following characteristics of useful accounting information. 1. Relevance. 2. Faithful representation. 3. Understandability. 4. Comparability. 5. Consistency. b. For each of the following pairs of information characteristics, give an example of a situation in which one of the characteristics may be sacrificed in return for a gain in the other. 1. Relevance and faithful representation. 2.…
Accounting information provides useful information about business transactions and events. Those whoprovide and use financial reports must often select and evaluate accounting alternatives. The Conceptual Framework examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade-offs or sacrifices among the characteristics of useful information.For each of the following pairs of information characteristics, provide a hypothetical situation in which inwhich one of the characteristics may be sacrificed in return for a gain in the other. Explain the situationand criterion should be used to evaluate trade-offs between information characteristics? give your opinionsthati) Relevance and faithful representation.ii) Comparability and consistency.iii) Relevance and consistency.iv) Relevance and understandability.
Which one of the following characteristics of accounting information is related to Objectivity? O a. The accounting information presented is truthful. Ob. The stable accounting treatment of similar transactions. OC. The accounting information must assist the users for making decision. Od. The accounting information is prepared and reported in a neutral way.
The primary objective of financial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities. Group of answer choices True False
An enhancing qualitative characteristics of financial accounting information is that: Information must be decision-useful to all potential users of financial reporting. General-purpose financial reporting is the primary source of information for users. Users need reasonable knowledge of business and financial accounting matters to understand the information contained in the financial statements. All of the choices are correct.
The following is a list of qualitative characteristics of useful accounting information identified in FASB's and 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. Different knowledgeable and independent observers can reach consensus that a particular representation is faithful. 2. Making information available to decision makers before it loses its capacity to influence decisions. 3. Capacity to make a difference in a decision, enabling users to predict future outcomes and/or confirm prior expectations. 4. Overall objective of financial information.
What two primary qualitative characteristics make accounting information useful? Predictive value and relevance. Relevance and neutrality. Faithful representation and relevance. Faithful representation and predictive value.
Discuss the four basic Assumptions that underline the financial Accounting Structures with example. b) Match the qualitative characteristics below with the following statements. I. Relevance VI. Comparability II.Faithful representation VII.Completeness III. Predictive value VIII.Neutrality IV.Confirmatory value IX.Timeliness V. Free from error X. Understandability (i) Quality of information that permits users to identify similarities in and differences between two sets of economic phenomena. (ii) Having information available to users before it loses its capacity to influence decisions. (iii) Information about an economic phenomenon that has value as an input to the processes used by capital providers to form their own expectations about the future.
The qualitative characteristics that make accounting information useful for decision-making purposes are as follows. Relevance Neutrality Verifiability Faithful representation Completeness Understandability Predictive value Timeliness Comparability Confirmatory value Materiality Free from error 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 company 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 fundamental quality of information. g. Four qualitative characteristics that are…

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