Qualitative Characteristics in Accounting

Relevance means financial information can influence the economic decisions of users.

• True

• False

Faithful representation requires information to be complete, neutral, and free from material error.

• True

• False

Financial information must always be perfect (zero errors) to be useful.

• True

• False

Comparability helps users identify similarities and differences in financial data.

• True

• False

Understandability means information should be so simple that no prior knowledge is needed.

• True

• False

Verifiability ensures different measurers would reach the same conclusion about the information.

• True

• False

Timeliness means information must be provided only at the end of the fiscal year.

• True

• False

The Economic Entity concept treats the business and its owner as separate entities.

• True

• False

The owner's personal assets should be included in the business's financial statements.

• True

• False

The Going Concern concept assumes the business will operate indefinitely.

• True

• False