Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 2 - Conceptual Framework for Financial Reporting - Review and Practice - Questions - Page 62: 25


Concept No. 5 identifies a number of characteristics that a statement of accounting must have inclusive of: i. Definition- where the items must meet the definition of an element of financial statements. ii. Measurability- the items must have a relevant attribute measurable with sufficient reliability. iii. Relevance- the information concerning these items must be capable of impacting the users during decision making. iv. Reliability- this characteristic requires that information withheld in these items should be verifiable, neutral as well faithful.

Work Step by Step

Its much imperative to note that; these qualitative characteristics of items to qualify to be statements of financial accounting are crucial since they are highly used by users to make effective and reasonable decisions.
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