Financial Reporting And Analysis - Financial Reporting And Analysis Section 1
- Option : B
- Explanation : The four principal qualitative characteristics that make financial information useful are understandability, relevance, reliability and comparability. Materiality relates to the level of detail of the information needed to achieve relevance – whether the omission or misstatement of the information would impact the decision maker's decision.
- Option : A
- Explanation : Relevance and faithful representation are the two fundamental qualitative characteristics that make financial information useful, according to the IASB Conceptual Framework.
- Option : A
- Explanation : For recognition in the financial statements, an element must have a cost or value that can be measured with reliability; certainty is not a requirement for economic benefits associated with an item to flow to or from the enterprise: all that is required is that it is probable that they will.
- Option : B
- Explanation : Relevance and faithful representation are the two fundamental qualitative characteristics that make financial information useful according to the IASB Conceptual Framework.
- Option : A
- Explanation : Transparency is not one of the characteristics. The characteristics are relevance, faithful presentation, comparability, timeliness, understandability and verifiability.
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