Which of the Following Actions Best Describes the Qualitative Characteristic

question 6

Multiple Choice

Which of the following actions best describes the qualitative characteristic "relevance"?

• A)The financial report of KMC Ltd was audited by one of the Big 4 four accounting firms.
• B)DGC limited provides quarterly financial reports.
• C)MCB Ltd and DGC Ltd both use accelerated depreciation method.
• D)GEP Ltd did not revalue its intangible assets because it was difficult to obtain the fair value of the assets.
• E)None of the given answers.

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Definitions:

Contra-Revenue Accounts

Accounts used to record reductions in gross revenue, such as sales returns, allowances, and discounts, to arrive at net revenue.

Gross Profit

The financial metric calculated by subtracting the cost of goods sold from total sales revenue, representing the efficiency of a company in managing its production and sales.

Perpetual System

An inventory system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the appropriate period for accurate financial reporting.