According to the FASB Hierarchy of Fundamental Qualitative Characteristics, the Two

question 71

Multiple Choice

According to the FASB hierarchy of fundamental qualitative characteristics, the two primary qualities making accounting information useful are

• A) understandability and decision usefulness
• B) relevance and faithful representation
• C) verifiability and neutrality
• D) predictive value and feedback value

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Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period of time.

Operating Activities

Components of a company's cash flow statement, which reflect the amounts of cash generated or spent from regular business operations.

Point In Time

A specific instant in the timeline when an event occurs, often used in financial reporting to refer to the recognition of transactions and events.

Investing Activities

Refers to the purchase and sale of long-term assets and other investments, not including cash equivalents.