Qualitative characteristics of accounting info

Question 1

What are the Qualitative characteristics of accounting info?

Answer 1

Relevance
Understandability
Comparability
Reliability

Question 2

What is relevance?

Answer 2

Information that helps users to predict the outcome of future events and to confirm/correct prior expectations.

Question 3

What is understandability

Answer 3

For users to understand it is assumed that they have some degree of knowledge of business and economic activities, and that they are willing to study the info with reasonable diligence.

Question 4

What is comparability

Answer 4

Info is comparable if it can be represented similarly by another business.

Question 5

What is reliability

Answer 5

It depends if the info is verifiable, neutral, and is free from error
(representation faithfulness; agreement between accounting numbers, resources, or events.