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:

Ledger

A comprehensive collection of all accounts and their transactions used in the accounting system of a business.

Chart

In finance and accounting, often refers to graphical representations of data, such as financial charts for analysis.

Accounts

Records within financial accounting that are used to track financial transactions and positions in various categories, such as assets, liabilities, equity, revenue, and expenses.

Prepaid Rent

An advance payment for rent that is recorded as an asset and then expensed over the period the payment covers.