choose the correct answer:

The overriding criterion by which accounting information can be judged is that of

1. comparability.
2. usefulness for decision making.
3. freedom from bias.
4. timeliness.

Which of the following is true about understandability as a qualitative characteristic of financial statements?

1. The onus to prepare understandable statements and to be able to understand them lies with the preparer and the user.
2. Where the underlying transactions or economic events are more complex, the user is expected to understand them without the assistance of an advisor.
3. Users with no knowledge of business and financial accounting matters are expected to understand the financial statements.
4. The onus to prepare understandable statements and to be able to understand them lies with the preparer.

Representational faithfulness includes

1. relevance, completeness and freedom from material error.
2. completeness, neutrality and comparability.
3. neutrality, completeness and freedom from material error.
4. neutrality, completeness, and understandability.

Comparability allows any financial statement user to

1. understand all the information presented.
2. verify all the data provided.
3. make timely decisions.
4. identify the real similarities and differences in economic phenomena.

Timeliness is increased by

1. comparative financial statements.
2. annual reporting.
3. representational faithfulness.
4. quarterly reporting.

Which of the following does not represent an essential characteristic of an asset?

1. The entity has control over the economic benefit.
2. There is some economic benefit to the entity.
3. The benefits result from a past transaction or event.
4. The entity is able to transfer the economic benefit if it so chooses.

Which of the following statements regarding liabilities is true?