Question

Indicate whether the following statements about the conceptual framework are true or false.

(a)		The fundamental qualitative characteristics that make accounting information useful are relevance and verifiability.		TrueFalse
(b)		Relevant information only has predictive value, confirmatory value, or both.		TrueFalse
(c)		Information that is a faithful representation is characterized as having predictive or confirmatory value.		TrueFalse
(d)		Comparability pertains only to the reporting of information in a similar manner for different companies.		TrueFalse
(e)		Verifiability is solely an enhancing characteristic for faithful representation.		TrueFalse
(f)		In preparing financial reports, it is assumed that users of the reports have reasonable knowledge of business and economic activities.		TrueFalse

Answer 1

(a)		The fundamental qualitative characteristics that make accounting information useful are relevance and verifiability.		True
(b)		Relevant information only has predictive value, confirmatory value, or both.		True
(c)		Information that is a faithful representation is characterized as having predictive or confirmatory value.		True
(d)		Comparability pertains only to the reporting of information in a similar manner for different companies.		False
(e)		Verifiability is solely an enhancing characteristic for faithful representation.		False
(f)		In preparing financial reports, it is assumed that users of the reports have reasonable knowledge of business and economic activities.		False