Scenario:

Accounting information provides useful information about business transactions. Those who provide and use financial reports must often select and evaluate accounting alternatives. The FASB statement on qualitative characteristics of accounting information examines the characteristics of accounting information that make it useful for decision$-$making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade$-$offs or sacrifices among characteristics of useful information.

Task:

Your group had been assigned one of the following pair of characteristics. In your group discussion, explain both characteristics, and give an example of a situation in which one of the characteristics may be sacrificed in return for a gain in the other:

Relevance and faithful representation.

Relevance and consistency.

Relevance and understandability.

Comparability and consistency.