Interactive workbook: Go back over this again - Exercise 1.9 – Relevance, faithful representation, comparability, verifiability, timeliness and understandability

Introduction

Use these true or false questions to check whether you can accurately define the qualities of accounting information. This exercise should be completed after reading pages 16-20 of Chapter 1.

. Faithfully represented information is capable of making a difference in users' decisions.

. Consistency of presentation and measurement of the same items in the same way from year to year will help to achieve comparability.

. Financial information must not only represent relevant economic data it must also faithfully represent the substance of the phenomena that it purports to represent.

. Relevant information must be free from error, neutral and complete.

. Relevant information may be either predictive, confirmatory or both.

. Accounting information is presented in a simple way so that everyone can understand it.

. The decision usefulness of information is enhanced if it is available to users in time for it to be capable of influencing their decisions.

. Verifiability provides users with assurance that information is relevant.