Asked by Elizabeth Hubbard on May 30, 2024
Verified
Which of the following statements is not true?
A) Comparability means using different accounting principles from year to year within a company.
B) Faithful representation means information must be neutral, complete, and free from error.
C) Relevant accounting information must be capable of making a difference in a user's decision.
D) For accounting information to be relevant, it must have timeliness.
Comparability
The ability to compare financial information across different entities or time periods to understand economic similarities and differences.
Faithful Representation
A fundamental qualitative characteristic in financial reporting, ensuring that financial statements are complete, neutral, and free from material error.
- Recognize the qualitative features that enhance the utility of financial information.
- Comprehend the distinctions between fundamental and enhancing qualitative attributes.
Verified Answer
SB
Shamara BullockJun 05, 2024
Final Answer :
A
Explanation :
Comparability in accounting refers to the ability to use financial information to compare the financial performance of a company over time or with other companies. It does not mean using different accounting principles from year to year within a company; rather, it emphasizes consistency in applying the same accounting principles over time to ensure that financial information is comparable.
Learning Objectives
- Recognize the qualitative features that enhance the utility of financial information.
- Comprehend the distinctions between fundamental and enhancing qualitative attributes.
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