(L.O. 4) Which of the following qualitative characteristics holds that the usefulness of accounting information is magnified when the information is classified, characterized, and presented clearly and consisely?

a. neutrality.

b. verifiability.

c. timeliness.

d. understandability.

Approach and Explanation: Visualize the diagram for the hierarchy of accounting qualities (Illustration 2-2).

Mentally review a description of each quality. For information to be useful, there must be a connection

(linkage) between users of information and the decisions they make. This link, understandability, (an enhancing quality of accounting information) is the quality of information that lets reasonably informed users see its significance. Understandability is enhanced when information is classified, characterized, and presented clearly and concisely. (Solution = d.)