Qualitative Characteristics in Financial Reporting

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What characteristic ensures that financial reports of a business can be compared over time?

Faithful representation

Comparability (correct)

Relevance

Verifiability

Which characteristic of financial information states that it should be available to decision makers in a timely manner?

Faithful representation

Timeliness (correct)

Understandability

Relevance

Which accounting assumption assumes that assets, liabilities, and business activities are recorded for a specific entity?

Conservatism principle

Materiality concept

Matching principle

Accounting entity assumption (correct)

What characteristic of financial information ensures that it is free from material error and without bias?

Faithful representation Signup and view all the answers

Which characteristic of financial information helps users to make predictions and change previous evaluations?

Relevance Signup and view all the answers

What characteristic of financial information requires that it be presented clearly and concisely for users?

Understandability Signup and view all the answers

What is the assumption behind the going concern principle in accounting?

The business will continue to operate in the future. Signup and view all the answers

How are revenue and expenses recognized in accounting under the accrual basis?

When they satisfy predefined recognition criteria. Signup and view all the answers

What is the definition of equity or owner's equity in accounting?

Remaining assets after liabilities are settled. Signup and view all the answers

In accounting, what is the classification criteria for non-current assets?

Not used for years. Signup and view all the answers

How are liabilities classified as current or non-current based on the accounting text?

Current liabilities are those settled within 12 months. Signup and view all the answers

Which of the following is NOT an example of an expense in accounting?

Capital contribution Signup and view all the answers

Qualitative Characteristics in Financial Reporting

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Questions and Answers

What characteristic ensures that financial reports of a business can be compared over time?

Which characteristic of financial information states that it should be available to decision makers in a timely manner?

Which accounting assumption assumes that assets, liabilities, and business activities are recorded for a specific entity?

What characteristic of financial information ensures that it is free from material error and without bias?

Which characteristic of financial information helps users to make predictions and change previous evaluations?

What characteristic of financial information requires that it be presented clearly and concisely for users?

What is the assumption behind the going concern principle in accounting?

How are revenue and expenses recognized in accounting under the accrual basis?

What is the definition of equity or owner's equity in accounting?

In accounting, what is the classification criteria for non-current assets?

How are liabilities classified as current or non-current based on the accounting text?

Which of the following is NOT an example of an expense in accounting?

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