Accounting information should make a difference to the outcome of a decision,according to the qualitative characteristic of
A) faithful representation.
B) relevance.
C) comparability.
D) understandability.

Question

Quizplus · Accepted Answer

The qualitative characteristic that requires accounting information to be relevant is directly related to the ability of that information to influence the outcomes of decisions. Relevant information is information that is capable of making a difference in the decisions made by users of the information. Faithful representation refers to the accuracy, completeness, and reliability of accounting information, comparability refers to the ability to compare different accounting information across time periods and companies, and understandability refers to the quality of accounting information being comprehensible to users with reasonable knowledge of business and economic activities. While these qualitative characteristics are all important, only relevance directly relates to the potential impact on decision-making outcomes.

Accounting Information Should Make a Difference to the Outcome of a Decision,according