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level: The Qualitative Characteristics of Financial Information

Questions and Answers List

level questions: The Qualitative Characteristics of Financial Information

QuestionAnswer
What are the qualities of Faithful Representation?- Completeness - Neutrality - Free from Error
What are the Fundamental Qualitative Characteristics of Financial Information?- Relevance - Faithful Presentation
What are the Enhancing Qualitative Characteristics of Financial Information?- Comparability & Consistency - Timeliness - Verifiability - Understandability
What are the Fundamental Accounting Concepts?- Fair Presentation - Going Concern - Accruals - Consistency - Materiality - Substance over form - Business Entity Concept
What is materiality ?"A threshold or cut-off point for information whose omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements."
When is understandability enhanced?When the information is: - Classified - Characterised - Presented clearly and consistently
What are the qualities of Relevance?Predictive value or Confirmatory value
What are the qualities of Faithful Representation?- Completeness - Neutrality - Free from Error
What is Relevance?Information that is capable of making a difference in the decisions made by users.
What is Faithful Representation?Accounting information should be presented in accordance with best practice and that the commercial substance of transactions should be presented in the financial statements, rather than their strict legal form.
What is Substance Over Form?The economic substance of a transaction should be reflected in the financial statements. Even when the legal form is in conflict.