Multiple Choice: Financial Reports Select the correct answer for each of the following:

For accounting information to be useful, it must be:

Relevant to a decision at hand.

Reliable.

Understandable.

Prepared in a consistent manner from period to period.

All of the above.

2. Accounting information is relevant if:

a. It is timely.

b. It helps the user understand and evaluate past actions and activities.

c. It helps the user formulate assessments about what might happen in the future.

d. All of the above.

3. The concept of consistency means:

a. All companies should report events in the same way.

b. A company should report similar events over time in the same way.

c. A company should report dissimilar events in the same way.

d. Different companies with dissimilar events should report them in the same way.

e. Answers a and b.

4. Verifiability means: