Here are some fundamental and enhancing qualitative characteristics of useful fi nancial information:
1. Comparability 7. Neutrality
2. Completeness 8. Predictive value
3. Confirmatory value 9. Relevance
4. Faithful representation 10. Timeliness
5. Freedom from error or bias 11. Understandability
6. Materiality 12. Verifiability
Instructions
Match each characteristic to one of the following statements, using the numbers 1 to 12.
(a) _______ Accounting information cannot be selected, prepared, or presented to favour one set of interested users over another.
(b) _______ Accounting information must be available to decision makers before it loses its ability to influence their decisions.
(c) _______ Accounting information is prepared on the assumption that users have a reasonable understanding of accounting and general business and economic conditions.
(d) _______ Accounting information provides a basis to evaluate a previously made decision.
(e) _______ Accounting information includes everything it needs to and nothing important is omitted. This is an important component of faithful representation.
(f) _______ Accounting information helps users make predictions about the outcome of past, present, and future events.
(g) _______ Accounting information about one company can be evaluated against the accounting information from another company.
(h) _______ Accounting information is included if its omission or misstatement could infl uence the economic decisions of users. This is an important component of relevance.
(i) _______ All the accounting information that is necessary to faithfully represent economic reality is included.
(j) _______ Accounting information can be determined to be free of material error.
(k) _______ Accounting information is included if it will make a difference in users' decisions.
(l) _______ Accounting information about a company can be confirmed by two or more users to be a faithful representation.