Exercise 2-2 (Qualitative Characteristics)
The qualitative characteristics that make accounting information useful for decision-making purposes are as follows.
Relevance Timeliness Representational faithfulness
Reliability Verifiability Comparability
Predictive value Neutrality Consistency
Identify the appropriate qualitative characteristic(s) to be used given the information provided below.
- Qualitative characteristic being employed when companies in the same industry are using the same accounting principles.
- Quality of information that confirms users earlier expectations.
3. Imperative for providing comparisons of a company from period to period.
- Ignores the economic consequences of a standard or rule.
- Requires a high degree of consensus among individuals on a given measurement.
- Predictive value is an ingredient of this primary quality of information.
- Two qualitative characteristics that are related to both relevance and reliability.
- Neutrality is an ingredient of this primary quality of accounting information.
- Two primary qualities that make accounting information useful for decision-making purposes
- Issuance of interim reports is an example of what primary ingredient of relevance?