The Main Qualities of Accounting Information That Make Accounting Information

question 116

Multiple Choice

The main qualities of accounting information that make accounting information useful for decision making are ________ and ________.

• A) relevance; reliability
• B) relevance; comparability
• C) consistency; comparability
• D) relevance; faithful representation

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Definitions:

Tax Contingency Reserve

A tax contingency reserve is an accounting provision made to cover potential tax liabilities that may arise due to uncertainties in the interpretation of tax laws or disputes with tax authorities.

Earnings Quality

An assessment of the true income generated by a company, gauging how accurately the reported income reflects the company's true earning power.

Deferred Tax Assets

Assets on a company's balance sheet that may be used to offset future tax liabilities.

IFRS

International Financial Reporting Standards, a set of global accounting guidelines for preparing financial statements.