Principles of Accounting

Which quality means the information is easy to understand for people who know a little about accounting?

• Understandable

• Reliable

• Relevant

• Comparable

Which quality means the information is free from big mistakes and truly shows how the company is doing?

• Comparable

• Relevant

• Understandable

• Reliable

Which quality means the information helps people make decisions about the company's past and future?

• Understandable

• Comparable

• Reliable

• Relevant

Which quality means the information is presented in a way that makes it easy to compare the company's results over time?

• Understandable

• Reliable

• Relevant

• Comparable

Materiality" means that only important information needs to be included in the financial

• True

• False

Timeliness" means that the information should be given to people quickly so it's still useful

• True

• False

Prudence" means that companies should always overestimate their income

• True

• False

Substance Over Form" means that how a transaction is recorded should reflect its true economic meaning, not just how it looks on paper

• True

• False

Completeness" means that all information, no matter how small, must be included in the financial reports

• True

• False

The "Cost vs. Benefit" principle means that the cost of getting information should always be less than the benefit of having that information

• True

• False