The Qualitative Characteristics Describe the Attributes That Enhance the Usefulness

question 52

Multiple Choice

The qualitative characteristics describe the attributes that enhance the usefulness of financial reporting information.The FASB's conceptual framework sets forth the qualitative characteristic of _____ envisions that the nature of the information is relevant and that its effect is large enough to influence a decision. As standard setters make decisions about financial reporting standards, they consider the costs and benefits of those standards.They assess whether the benefits to users of financial reports from a particular financial reporting requirement exceed the costs of providing the information.

• A)relevance
• B)reliability
• C)comparability
• D)materiality
• E)understandability

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Definitions:

Compounded Quarterly

A method of calculating interest in which the interest is added to the principal amount every three months, then interest is calculated on the new total.

Principal Earning

The portion of an investment's return that is generated from the original amount invested, excluding any interest earned.

Six Years

A period of time equal to six times the length of one calendar year.

Present Value

The present worth of a future amount of money or series of cash flow at a given return rate.