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

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Definitions:

Sales Amount

The total revenue generated from the sale of goods or services over a specific period.

FOB Destination

A shipping term indicating that the seller is responsible for the goods and the cost of transport until they are delivered to the buyer's location.

Prepaid Freight Costs

Expenses paid in advance for the transportation of goods.

Purchases Discount

A reduction in the price paid for goods and services if payment is made within a certain period, often used to encourage early payment.