Which of the following actions best describes the qualitative characteristic 'relevance'?
A) The financial report of KMC Ltd 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 Ltd and DGC Ltd both use accelerated depreciation method.
D) GEP Ltd did not revalue its intangible assets because it was difficult to obtain the fair value of the assets.

Question

Quizplus · Accepted Answer

The action described in option B best describes the qualitative characteristic of relevance, as it pertains to information that can influence a user's economic decisions. Omitting a sales transaction will have an impact on the financial statements and could potentially affect a user's decision-making process. The actions in the other options may be important, but do not necessarily relate to influencing economic decisions.

Which of the Following Actions Best Describes the Qualitative Characteristic