In: Accounting
The following selected items relate to the qualitative
characteristics of useful information:
1. |
Comparability |
7. |
Predictive value | |||
---|---|---|---|---|---|---|
2. |
Materiality |
8. |
Consistency | |||
3. |
Neutrality |
9. |
Understandability | |||
4. |
Timeliness |
10. |
Verifiability | |||
5. |
Faithful representation |
11. |
Completeness | |||
6. |
Feedback value |
Match these qualitative characteristics to the following
statements.
(a) |
Financial information must be available to decision makers before the information loses its ability to influence their decisions. |
select a qualitative characteristic
VerifiabilityComparabilityMaterialityUnderstandabilityNeutralityFaithful representationTimelinessCompletenessFeedback valuePredictive valueConsistency |
||
---|---|---|---|---|
(b) |
Financial information provides a basis to evaluate decisions made in the past. |
select a qualitative characteristic
ComparabilityTimelinessFaithful representationVerifiabilityPredictive valueFeedback valueCompletenessMaterialityConsistencyUnderstandabilityNeutrality |
||
(c) |
Financial information cannot be selected, prepared, or presented to favour one set of interested users over another. |
select a qualitative characteristic
ComparabilityFeedback valueMaterialityConsistencyVerifiabilityCompletenessPredictive valueNeutralityTimelinessFaithful representationUnderstandability |
||
(d) |
Financial information reports the economic substance of a transaction, not its legal form. |
select a qualitative characteristic
UnderstandabilityPredictive valueVerifiabilityFeedback valueCompletenessComparabilityMaterialityNeutralityTimelinessFaithful representationConsistency |
||
(e) |
Financial information helps reduce uncertainty about the future. |
select a qualitative characteristic
UnderstandabilityConsistencyVerifiabilityFaithful representationComparabilityMaterialityTimelinessNeutralityCompletenessFeedback valuePredictive value |
||
(f) |
Financial information must be provided in such a way that knowledgeable and independent people agree that it faithfully represents the economic reality of the transaction or event. |
select a qualitative characteristic
ComparabilityFaithful representationMaterialityNeutralityTimelinessUnderstandabilityFeedback valuePredictive valueConsistencyVerifiabilityCompleteness |
||
(g) |
Financial information about one company can be evaluated in relation to financial information from another company. |
select a qualitative characteristic
VerifiabilityTimelinessNeutralityCompletenessMaterialityComparabilityUnderstandabilityFaithful representationFeedback valuePredictive valueConsistency |
||
(h) |
Financial information is provided in a way that enables reasonably informed users to interpret and comprehend the meaning of the information provided in the financial statements. |
select a qualitative characteristic
ConsistencyMaterialityNeutralityUnderstandabilityFeedback valueVerifiabilityComparabilityCompletenessTimelinessFaithful representationPredictive value |
||
(i) |
Financial information in a company is prepared using the same principles and methods year after year. |
select a qualitative characteristic
Predictive valueUnderstandabilityTimelinessComparabilityVerifiabilityConsistencyMaterialityFaithful representationNeutralityCompletenessFeedback value |
||
(j) |
Financial information that is insignificant and not likely to influence a decision does not need to be disclosed. |
select a qualitative characteristic
Predictive valueTimelinessComparabilityNeutralityVerifiabilityFaithful representationMaterialityFeedback valueConsistencyUnderstandabilityCompleteness |
||
(k) |
Financial information includes all information necessary to show the economic reality of the transaction. |
S.N. |
Statement |
Qualitative Characterstics |
Match Number |
|||
a) |
Financial Information must be available to decision maler before the information lost its ability to infulence their decisions. |
Timeliness |
(4) |
|||
b) |
Financial Information provides the basis to evaluate decisions made in the past |
Feedback Value |
(6) |
|||
C ) |
Financial information cannot be selected,prepared,or presented to favor one set of interested user over another. |
|
(3) |
|||
d) |
Financial information reports the economic substance of a transaction, not its legal form. |
Faithful Representation |
(5) |
|||
e) |
Financial information helps to reduce uncertainity about in the future. |
Predictive Value |
(7) |
|||
f) |
Financial information should be provided in such a way that knowledge and independent people agree that is faithfully represent economic reality of transations and events. |
Verifiability |
(10) |
|||
g) |
Financial information about one company can be evaluated in relation to financial information from other Company. |
Comparability |
(1) |
|||
h) |
Financial information should be provided in a way that enables reasonably informed users to interpret and comprehend the meaning of the information provided in the financial statement. |
Understandability |
(9) |
|||
i) |
Financial information in a company is prepared using the same principal and methods year after year. |
Consistency |
(8) |
|||
j) |
Financial information that is insignificant and not likely to influence a decision does not need to be disclosed. |
Materiality |
(2) |
|||
K) |
Financial information includes all information necessary to show the economic reality of the transactions. |
Completeness |
(11) |