Question Details

Financial information does not demonstrate consistency when



1.	Accounting information is considered to be relevant when it
a.	can be depended on to represent the economic conditions and events that it is intended to represent.
b.	is capable of making a difference in a decision.
c.	is understandable by reasonably informed users of accounting information.
d.	is verifiable and neutral.
	2.	The quality of information that gives assurance that it is reasonably free of error and bias 
a.	relevance.
b.	faithful representation.
c.	verifiability.
d.	neutrality.
	3.	Financial information does not demonstrate consistency when
a.	firms in the same industry use different accounting methods to account for the same type of transaction.
b.	a company changes its estimate of the salvage value of a fixed asset.
c.	a company fails to adjust its financial statements for changes in the value of the measuring unit.
d.	none of these.
	4.	When information about two different enterprises has been prepared and presented in a similar manner, the information exhibits the characteristic of
a.	relevance.
b.	reliability.
c.	consistency.
d.	none of these.

	5.	The second level of the International Accounting Standards Board- (IASB-) Conceptual Framework
a.	provides conceptual building blocks that explain the qualitative characteristics of accounting information.
b.	defines the elements of financial statements.
c.	serves as a bridge between the “why” of accounting and the “how” of accounting.
d.	all of the choices are correct.




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