Under Statement of Financial Accounting Concepts No

question 12

Multiple Choice

Under Statement of Financial Accounting Concepts No.2,which of the following is an ingredient of the primary quality of reliability?

• A)Understandability
• B)Verifiability
• C)Predictive value
• D)Materiality

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Definitions:

Utility Function

A mathematical representation of how different combinations of goods or services can result in varying levels of satisfaction or utility to a consumer.

Consumer's Surplus

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

Earplugs

Small devices inserted into the ear canal to protect the ears from loud noises, water, or foreign bodies.

Consumer's Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount they actually pay.