Exercise 2-2 (Qualitative Characteristics)

Exercise 2-2 (Qualitative Characteristics)

            The qualitative characteristics that make accounting information useful for decision-making purposes are as follows.

Relevance                                      Timeliness                         Representational faithfulness

Reliability                                      Verifiability                       Comparability

Predictive value                            Neutrality                          Consistency

Feedback value

Instructions

            Identify the appropriate qualitative characteristic(s) to be used given the information provided below.

1. Qualitative characteristic being employed when companies in the same industry are using the same accounting principles.

1. Quality of information that confirms users’ earlier expectations.

3. Imperative for providing comparisons of a company from period to period.

1. Ignores the economic consequences of a standard or rule.

1. Requires a high degree of consensus among individuals on a given measurement.

1. Predictive value is an ingredient of this primary quality of information.

1. Two qualitative characteristics that are related to both relevance and reliability.                                                

1. Neutrality is an ingredient of this primary quality of accounting information.                                                  

1. Two primary qualities that make accounting information useful for decision-making purposes

1. Issuance of interim reports is an example of what primary ingredient of relevance?