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 1. Describe briefly the following characteristics of useful accounting information. 1. Relevance. 2. Faithful representation, 3. Understandability, 4. Comparability (consistency). 5. Neutrality. 2. 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.
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 1. Describe briefly the following characteristics of useful accounting information. 1. Relevance. 2. Faithful representation, 3. Understandability, 4. Comparability (consistency). 5. Neutrality. 2. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
answer no 2 thankyou
Transcribed Image Text: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
1. Describe briefly the following characteristics of useful accounting information.
1. Relevance.
2. Faithful representation.
3. Understandability
4. Comparability (consistency).
5. Neutrality.
2. 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.
4
7.
8
2. Relevance and consistency.
3. Comparability and consistency.
4. Relevance and understandability
6.
10
11
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education