Question

To faithfully represent what occurs, accounting information needs to be ______________, complete and neutral. a. reliable...

To faithfully represent what occurs, accounting information needs to be ______________, complete and neutral.

a. reliable

b. free from error

c. relevant

d. timely

Homework Answers

Answer #1

To faithfully represent what occurs, accounting information needs to be ______, complete and neutral. The correct answer is Option B - Free from error. Faithful representation is also known as reliability, is the extent to which financial information accurately depicts company's standing , resources, obligations, etc. For accounting information to faithfully represent what occurs, it needs to be reliable, complete and neutral.

Option A is incorrect. Faithful representation is also known as reliability. Under reliability of accounting information, the information needs to be free from error, complete and neutral.

Option C and Option D are incorrect because these are secondary qualitative characteristics and under the purview of faithful representation, accounting information needs to be free from error, complete and neutral.

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