The Requirement That Financial Report Information Is Comprehensible to Users

question 22

Multiple Choice

The requirement that financial report information is comprehensible to users who have a reasonable knowledge of business and accounting is known as:

• A)understandability
• B)relevance
• C)materiality
• D)reliability

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Definitions:

Jargon

Specialized language used by a particular profession or group that may be difficult for outsiders to understand.

Precise Words

Language that is clear and exact, with no ambiguity or vagueness.

Concrete Messages

Communication that is clear, specific, and detailed, making it easily understood by the receiver.

Facial Expression

The use of facial muscles to convey emotions, reactions, or responses, serving as a non-verbal form of communication.