Give some reasons why the off- main diagonal probabilities of an information system such as that depicted in Table 3.2 are non- zero. Use the concepts of relevance and reliability in your answer. Explain why an information system is more useful the lower the off- main diagonal probabilities are.
Answer to relevant QuestionsDecision usefulness is an important accounting concept. Required a. State the decision usefulness approach to accounting theory. b. What two questions arise once the decision usefulness approach is adopted?c. What primary ...Lucas has $ 2,000 that he wishes to invest for one year. He has narrowed his choices down to one of the following two actions: a1: Buy bonds of X Ltd., a company that has a very high debt– equity ratio. These bonds pay 8% ...Shares of firm A and firm B are traded on an efficient market. The two firms are similar in their operations, are of the same size and risk, and are growing rapidly. They both report the same net income. However, you see in ...You have just obtained inside information about a firm that employs you and in which you own shares. The information is that the current quarter’s earnings will be substantially below forecast. Should you sell your shares ...Give examples of components of net income with a. High persistence b. Persistence of 1 c. Persistence of 0 Assume that the firm uses historical cost accounting.
Post your question