The Framework for the Preparation and Presentation of Financial Statements examines the characteristics of accounting information that make this information useful for decision-making. It also points out that various limitations, which are inherent in the measurement and reporting process, may necessitate trade-offs between these limitations and the positive characteristics of useful information.
1. Briefly describe the following characteristics of useful accounting information: 

a. Relevance 

b. Reliability 

c. Understandability 

d. Comparability.
2. For each of the following pairs of information characteristics, give an example of a situation in which one of the characteristics may be sacrificed in return for a gain in the other:
a. Relevance and reliability 

b. Relevance and comparability 

c. Relevance and understandability.
3. What criterion should be used to evaluate trade-offs between information characteristics?