1)Relevant accounting information

a) Is information that has been audited.

b) must be reported within one year.

c) has been objectively determined.

d) is information that is capable of making a difference in a decision.

2)If accounting information has predictive value, it is useful in making predictions about

a)the economic environment the company operates in.

b)world events that impact the economy.

c)future interest rates and foreign currency exchange rates.

d)future events of a company.

3)If accounting information has confirmatory value, it

a)has been verified by an external audit

b)is prepared on an annual basis.

c)confirms or corrects prior expectations.

d)is neutral in its representations.

4)In order for accounting information to be relevant, it must

a)have very little cost.

b)have predictive or confirmatory value.

c)be comparable.

d)be used by a lot of different firms.

5)When preparing financial statements, comparability is important. Which of the following statements reflects comparability?

a)The same accounting principles are used from year to year.

b)Companies with similar circumstances use the same accounting principles.

c)Information makes a difference in a decision.

d)Information is free from bias that is intended to attain a predetermined result.