Pervasive constraint by the conceptual framework

What is the quality of information that enables users to confirm or correct prior expectations?

Confirmatory Value

Identify the pervasive constraint developed in the conceptual framework.

Cost/Benefit

The chairman of the SEC at one time noted, "If it becomes accepted or expected that accounting principles are determined or modified in order to secure purposes other than economic measurement, we assume a grave risk that confidence in the credibility of our financial information system will be undermined." Which qualitative characteristic of accounting information should ensure that such a situation will not occur?

Neutrality

Muruyama Corp. switches from FIFO to average cost to FIFO over 2 year period. Which qualitative characteristic of accounting information is not followed?

Comparability (Consistency)

Assume that the profession permits the savings and load industry to defer losses on investments it sells because immediate recognition of the loss may have adverse economic consequences on the industry. Which qualitative characteristic of accounting information is not followed?

Neutrality

What are the 2 fundamental qualities that make accounting information useful for decision making?

Relevance/Faithful Representation

Watteau Inc. does not issue its first quarter report until after the second quarter's results are reported.

Timeliness

Predictive value is an ingredient of which of the 2 fundamental qualities that make accounting information useful for decision making purposes?

Relevance

Duggan, Inc. is the only company in its industry to depreciate its plant assets on a straight line basis. Which qualitative characteristic of accounting information may not followed?

Comparability

Roddic Company has attempted to determine the replacement cost of its inventory. 2 different appraiser arrive at substantially different amounts for this value. The president, nevertheless, decides to report the middle value for external reporting purposes. Which qualitative characteristic of information is lacking in these data?

Verifiability

Qualitative characteristic being employed when companies in the same industry are using the same accounting principles.

Comparability

Quality of information that confirms users' earlier expectations.

Confirmatory Value

Imperative for providing comparisons of a company from period to period.

Comparability (Consistency)

Ignores the economic consequences of a standard or rule.

Neutrality

Requires a high degree of consensus among individuals on a given measurement.

Verifiability

Predictive value is an ingredient of this fundamental quality of information.

Relevance

4 qualitative characteristics that are related to both relevance and faithful representation.

Comparability, verifiability, timeliness, and understandability

An item is not recorded because its effect on income would not change a decision.

Materiality

Neutrality is an ingredient of this fundamental quality of accounting information.

Relevance

2 fundamental qualities that make accounting information useful for decision making purposes.

Relevance/Faithful Representation

Issuance of interim report is an example of what enhancing quality of relvence?

Timeliness