What is the quality of information that enables users to confirm or correct prior
expectations? - (correct answer)Confirmatory Value
Identify the pervasive constraint(s) developed in the conceptual framework. - (correct
answer)Cost
The chairman of the SEC at one time noted, "If it becomes accepted or expected that
accounting principles are determined or modified in order to secure purposes other than
economic measurement, we assume a grave risk that confidence in the credibility of our
financial information system will be undermined." Which qualitative characteristic of
accounting information should ensure that such a situation will not occur? (Do not use
representationally faithful.) - (correct answer)Neutrality
Muruyama Corp. switches from FIFO to average cost to FIFO over a 2-year period.
Which qualitative characteristic of accounting information is not followed? - (correct
answer)comparability
Assume that the profession permits the savings and loan industry to defer losses on
investments it sells, because immediate recognition of the loss may have adverse
economic consequences on the industry. Which qualitative characteristic of accounting
information is not followed? (Do not use relevance or representationally faithful.) -
(correct answer)Neutrality
What are the two primary qualities that make accounting information useful for decision-
making? - (correct answer)Relevance & faithful representation
Watteau Inc. does not issue its first-quarter report until after the second quarter's results
are reported. Which qualitative characteristic of accounting is not followed? (Do not use
relevance.) - (correct answer)Timeliness
expectations? - (correct answer)Confirmatory Value
Identify the pervasive constraint(s) developed in the conceptual framework. - (correct
answer)Cost
The chairman of the SEC at one time noted, "If it becomes accepted or expected that
accounting principles are determined or modified in order to secure purposes other than
economic measurement, we assume a grave risk that confidence in the credibility of our
financial information system will be undermined." Which qualitative characteristic of
accounting information should ensure that such a situation will not occur? (Do not use
representationally faithful.) - (correct answer)Neutrality
Muruyama Corp. switches from FIFO to average cost to FIFO over a 2-year period.
Which qualitative characteristic of accounting information is not followed? - (correct
answer)comparability
Assume that the profession permits the savings and loan industry to defer losses on
investments it sells, because immediate recognition of the loss may have adverse
economic consequences on the industry. Which qualitative characteristic of accounting
information is not followed? (Do not use relevance or representationally faithful.) -
(correct answer)Neutrality
What are the two primary qualities that make accounting information useful for decision-
making? - (correct answer)Relevance & faithful representation
Watteau Inc. does not issue its first-quarter report until after the second quarter's results
are reported. Which qualitative characteristic of accounting is not followed? (Do not use
relevance.) - (correct answer)Timeliness
