Accounting information is considered to be relevant when it
A) can be depended on to represent the economic conditions and events that it is intended to represent.
B) is capable of making a difference to a decision-maker.
C) is understandable by reasonably informed users of accounting information.
D) is verifiable and neutral.

Question

Quizplus · Accepted Answer

Relevant accounting information is capable of making a difference to a decision-maker. Accounting information that is not relevant may not affect decision-making and therefore may not be useful. A, C, and D are also important qualities of accounting information but do not directly relate to relevance.

Accounting Information Is Considered to Be Relevant When It