If an Investor Can Use Accounting Information for Two Different

question 128

Multiple Choice

If an investor can use accounting information for two different companies to evaluate the types and amounts of expenses, the information is said to have the quality of

• A) Comparability
• B) Consistency
• C) Neutrality
• D) Understandability

---

Definitions:

Exact Interest

A redefined term referring to the method of calculating interest based on a 365-day year, highlighting the precision in financial computations.

365-Day Year

A calendar year consisting of 365 days, not accounting for leap years which have 366 days.

Total Amount

The full sum resulting from the addition of all parts, quantities, or figures.

Exact Interest

A method of calculating interest using a 365-day year or actual number of days in a loan's term, leading to a more precise interest calculation.