What Are the Four Key Qualities of Accounting Information

question 38

Multiple Choice

What are the four key qualities of accounting information?

• A)relevance, reliability, comparability, and understandability.
• B)identification, analysis, reliability, and timeliness.
• C)planning, control, comparability and analysis
• D)understandability, identification, analysis, and relevance.

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Definitions:

Permanent Accounts

Accounts on the balance sheet whose balances are carried over into the next accounting period.

Post-closing Trial Balance

A list of all company accounts that remain after adjusting entries and closing entries have been made, used to test the balance of debits and credits.

Asset Accounts

Accounts on a balance sheet representing resources owned or controlled by a company with future economic value.

Liability Accounts

Accounts that represent amounts owed to creditors or bills that must be paid in the future, contributing to a company’s liabilities on the balance sheet.