E2-4 GRADE A QUESTION AND ANSWERS
Qualitative characteristic being employed when companies in the same industry are
using the same accounting principles. - (correct answer)comparability
Quality of information that confirms users' earlier expectations. - (correct
answer)confirmatory value
Imperative for providing comparisons of a company from period to period. - (correct
answer)comparability (consistency)
Ignores the economic consequences of a standard or rule. - (correct answer)Neutrality
Requires a high degree of consensus among individuals on a given measurement. -
(correct answer)verifiability
Predictive value is an ingredient of this primary quality of information - (correct
answer)relevance
Four qualitative characteristics that are related to both relevance and faithful
representation - (correct answer)comparability, timeliness, verifiability, understandability
An item is not recorded because its effect on income would not change a decision -
(correct answer)materiality
Neutrality is an ingredient of this primary quality of accounting information. - (correct
answer)faithful representation
Two primary qualities that make accounting information useful for decision-making
purposes - (correct answer)relevance, faithful representation
Qualitative characteristic being employed when companies in the same industry are
using the same accounting principles. - (correct answer)comparability
Quality of information that confirms users' earlier expectations. - (correct
answer)confirmatory value
Imperative for providing comparisons of a company from period to period. - (correct
answer)comparability (consistency)
Ignores the economic consequences of a standard or rule. - (correct answer)Neutrality
Requires a high degree of consensus among individuals on a given measurement. -
(correct answer)verifiability
Predictive value is an ingredient of this primary quality of information - (correct
answer)relevance
Four qualitative characteristics that are related to both relevance and faithful
representation - (correct answer)comparability, timeliness, verifiability, understandability
An item is not recorded because its effect on income would not change a decision -
(correct answer)materiality
Neutrality is an ingredient of this primary quality of accounting information. - (correct
answer)faithful representation
Two primary qualities that make accounting information useful for decision-making
purposes - (correct answer)relevance, faithful representation
