Question

Which characteristic is reflected when accounting information is presented in a manner easily comprehended by users?

• A. Relevance
• B. Reliability
• C. Understandability
• D. Comparability

Answer 1

Answer:

C. Understandability

QUALITATIVE CHARACTERISTICS OF ACCOUNTING INFORMATION

1. RELIABILITY - Means the users must be able to depend on accounting information. Reliable information should be free from error and verifiable with help of evidences such as bill, receipts e.t.c

2. RELEVANCE - To be relevant ,information must be available in time ,therefore accounting information is relevant if it can provide helpful information about past events and help in predicting future events.

3. UNDERSTANDABILITY - Accounting information should be recorded ,presented and interpreted in such a way that it should be easily understood by users.

4. COMPARABILITY - Comparability means that the users should be able to compare the accounting information of an enterprise of the period either with that of other periods or with the accounting information of other enterprises