Which of the following actions best describes the qualitative characteristic 'relevance'?
A)The financial report of KMC Plc was audited by one of the Big 4 four accounting firms.
B)DGC omitted a sales transaction equal to 10.5% of its accounts receivable.
C)MCB Plc and DGC Plc both use accelerated depreciation method.
D)GEP Plc did not revalue its intangible assets because it was difficult to obtain the fair value of the assets.

Question

Quizplus · Accepted Answer

The action that best describes the qualitative characteristic 'relevance' is when a sales transaction equal to 10.5% of the accounts receivable is omitted. This is because the omission of such a large transaction could significantly impact the financial statements and therefore be relevant to users of the information. The other options do not have the same level of impact on the financial statements and are therefore less relevant.

Which of the Following Actions Best Describes the Qualitative Characteristic