The Qualitative Characteristics of Financial Reports That Make Information Useful

question 25

Multiple Choice

The qualitative characteristics of financial reports that make information useful to users are:

• A) Understandability
• B) Reliability
• C) Comparability
• D) Understandability, reliability and comparability

---

Definitions:

Benefit Surpluses

The extra utility or satisfaction gained by consumers when the price they are willing to pay for a good or service exceeds the market price.

Willingness To Pay

The maximum amount an individual is prepared to offer for a good or service, reflecting the value they place on it.

Supply Curve

A graphical representation that shows the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to supply to the market.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit to consumers.