Relevance Is an Objective of External Financial Reporting That Means

question 104

Multiple Choice

Relevance is an objective of external financial reporting that means:

• A)the financial reports of a business are assumed to include the results of only that business's activities.
• B)financial information can be compared across businesses because similar accounting methods have been applied.
• C)the financial information possesses a feature that allows it to influence a decision.
• D)the financial information depicts the economic substance of business activities.

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Definitions:

Theory

A system of ideas intended to explain something, based on general principles independent of the thing to be explained.

Data Analysis

The process of inspecting, cleansing, transforming, and modeling data with the goal of discovering useful information, informing conclusions, and supporting decision-making.

Qualitative Data

Data that is descriptive and conceptual, often gathered through observations, interviews, and narratives.

Categorization

The process of identifying an item of data as belonging to a category predetermined by the researcher or generated from the information provided by informants.