ExpertMedium2 marksMultiple Choice
ACCA · Question 02 · Qualitative Characteristics of Financial Information
Section A
MetroWater, a public utility company, is finalizing its annual report. The chief accountant wants to ensure the financial information meets the qualitative characteristics defined by the IASB Conceptual Framework.
Which TWO of the following are classified as ENHANCING qualitative characteristics of financial information?
Section A
MetroWater, a public utility company, is finalizing its annual report. The chief accountant wants to ensure the financial information meets the qualitative characteristics defined by the IASB Conceptual Framework.
Which TWO of the following are classified as ENHANCING qualitative characteristics of financial information?
Answer options:
A.
Relevance
B.
Comparability
C.
Faithful representation
D.
Understandability
How to approach this question
Recall the IASB Conceptual Framework. Fundamental characteristics are Relevance and Faithful Representation. Enhancing characteristics are Comparability, Verifiability, Timeliness, and Understandability.
Full Answer
According to the IASB Conceptual Framework, the fundamental qualitative characteristics are relevance and faithful representation. The enhancing qualitative characteristics are comparability, verifiability, timeliness, and understandability.
Common mistakes
Confusing fundamental characteristics with enhancing ones.
Practice the full ACCA FA — Financial Accounting Practice Exam 5
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