Accounting Quiz

Qualitative characteristic being displayed when companies in the same industry are using the same accounting principles.

• Verifiability

• Comparability

• Faithful representation

• Confirmatory value

Quality of information that confirms users’ earlier expectations.

• Confirmatory value

• Understandability

• Comparability

• Predictive value

Imperative for providing comparisons of a company from period to period.

• Timeliness

• Verifiability

• Understandability

• Comparability

Ignores the economic consequences of a standard or rule.

• Predictive value

• Materiality

• Neutrality

• Confirmatory value

Requires a high degree of consensus among individuals on a given measurement.

• Neutrality

• Verifiability

• Timeliness

• Materiality

Predictive value is an ingredient of this fundamental quality of information.

• Relevance

• Verifiability

• Faithful Representation

• Confirmatory Value

One of four qualitative characteristics that enhance both relevance and faithful representation.

• Confirmatory value

• Materiality

• Timeliness

• Neutrality

An item is not reported because its effect on income would not change a decision.

• Materiality

• Timeliness

• Neutrality

• Confirmatory value

Neutrality is a key ingredient of this fundamental quality of accounting information.

• Relevance

• Faithful representation

• Confirmatory value

• Predictive value

Two fundamental qualities that make accounting information useful for decision-making purposes.

• Relevance

• Understandability

• Faithful representation

• Comparability