Here are some qualitative characteristics of useful accounting information: 1. Predictive value 2. Neutral 3. Verifiable 4. Timely Match each qualitative characteristic to one of the following statements. (a) Accounting information should help provide accurate expectations about future events. (b) Accounting information cannot be selected, prepared, or presented to favor one set of interested users over another. (c) The quality of information that occurs when independent observers, using the same methods, obtain similar results. (d) Accounting information must be available to decision-makers before it loses its capacity to influence their decisions. > > > >

Here are some qualitative characteristics of useful accounting information: 1. Predictive value 2. Neutral 3. Verifiable 4. Timely Match each qualitative characteristic to one of the following statements. (a) Accounting information should help provide accurate expectations about future events. (b) Accounting information cannot be selected, prepared, or presented to favor one set of interested users over another. (c) The quality of information that occurs when independent observers, using the same methods, obtain similar results. (d) Accounting information must be available to decision-makers before it loses its capacity to influence their decisions. > > > >

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.…
Which one of the following statements is not correct regarding financial accounting and management accounting? O a. Financial accounting reports need to be audited to verify their accuracy unlike management accounting reports which do not need to be audited. O b. Only financial accounting involves the use of accounting information. Management accounting information emphasize supporting decisions that affect the future unlike financial accounting information, which focus on the consequences of past activities of the organization. O c. O d. None of the given answers Financial accounting needs to follow specific set of rules called accounting standards unlike management accounting O e.
Which among the following are the reasons why regulation of the accounting profession is essential? i. Regulations address the knowledge imbalance between the provider and purchaser of professional service. ii. Regulations ensure that accounting services are of the right quality. iii. Regulations ensure that the cost benefits to these third parties are taken into account. a. i and ii b. i, ii, and iii c. i and iii d. ii and iii
Which of the following is incorrect? A. Non-assurance engagement include agree-upon procedures, compilation of financial or other information and tax consulting B. Assurance service report on the quality of information C. All engagements perform by the professional accountant are assurance engagement D. Assurance engagement encompass attestation engagement
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.
Which of the following is not considered an analyticalaspect of the accounting profession?a. Evaluating an organization’s operational effi ciency.b. Forecasting the probable results of future operations.c. Designing systems that provide information to decisionmakers.d. Journalizing and posting business transactions.
Accounting concepts form the fundamental principles upon which financial accounting is based. These concepts provide a framework for recording, reporting, and interpreting financial transactions in a consistent and meaningful manner. One of the key accounting concepts is the principle of conservatism, which dictates that when faced with uncertainty, accountants should err on the side of caution by recognizing potential losses immediately while delaying the recognition of potential gains until they are realized. This concept ensures that financial statements provide users with a reliable representation of an entity's financial position and performance, even in the face of uncertainty Question: How does the principle of conservatism contribute to the reliability of financial statements?
Discuss the types of errors in financial accounting and explain why some errors need to go through suspense account. Your discussion should include the purpose of suspense account
How can the qualitative faithful representation (reliability) characteristic be improved in high-quality accounting information? Do not simply repeat what it is, provide suggestions as to how a particular part of the qualitative characteristics could be improved. Please provide different answers and explanations than copy and pasting: “Accounting information is reliable if these are-Complete - Financial statements should not exclude any transaction, Neutral - The degree to which information is free from bias. Note that there are subjectivity and estimation involved in financial statements, therefore information cannot be truly "neutral." However, if a company polled 1,000 accountants and took the average of their answers, that would be considered neutral and free from bias. and Free from error - The degree to which information is free from errors.”
The fundamental qualitative characteristics that financial information must possess to be useful to theprimary users of general purpose financial reports—identified in the Conceptual Framework are‘relevance’ and ‘faithful representation’.Required:a) Provide one example where information is relevant but not faithfully represented. (maximum 100 words)b) Provide one example where information is not relevant but is faithfully represented.(maximum 100 words)c) Provide one example where information is relevant and faithfully represented.