FASB Statement of Financial Accounting Concepts No. 2 indicates several qualitative characteristics of useful accounting information. Following is a list of some of these qualities, as well as a list of statements and phrases describing the qualities.
a. Benefits > costs
b. Decision usefulness
e. Predictive value, feedback value, timeliness
f. Verifiability, neutrality, representational faithfulness
i. Relevance, reliability
____ 1. Without usefulness, there would be no benefits from information to set against its cost.
____ 2. Pervasive constraint imposed on financial accounting information.
____ 3. Constraint that guides the threshold for recognition.
____ 4. A quality requiring that the information be timely and that it also have predictive value, feedback value, or both.
____ 5. A quality requiring that the information have representational faithfulness and that it be verifiable and neutral.
____ 6. These are the two primary qualities that make accounting information useful for decision making.
____ 7. These are the ingredients needed to ensure that the information is relevant.
____ 8. These are the ingredients needed to ensure that the information is reliable.
____ 9. Includes consistency and interacts with relevance and reliability to contribute to the usefulness of information.
Place the appropriate letter identifying each quality on the line in front of the statement or phrase describing the quality.