Qualitative Characteristics of Accounting Information

A set of vocabulary flashcards covering the fundamental and enhancing qualitative characteristics of accounting information as detailed in the lecture transcript.

Relevance

A fundamental qualitative characteristic where information can influence economic decisions made by users.

Materiability

Information is material if its size or nature is important enough to influence the decisions being made; without it, information is useless or even misleading.

Predictive value

Information used to make perdicates as to what is likely to happen in the near future based on the past and present.

Confirmatory value

The information provides feedback which aids in confirming previous desicions.

Faithful representation

Means that the user is assured that the information persented is complete, without bias and neutral.

Complete

A component of faithful representation where all necessary information about an item is included.

Neutral

Characteristics of information being persented without bias or manipulation.

Enhancing Qualitative charactristics

Characteristics that impr the quality of info; these include comparability, verfiability, timeliness, and understandability.

Comparability

Quality of information that enabe users to identify similarities and differences between two sets of Financial dats.

Consistency

A character of comparability which requires the use of Same accounting Principles and Polices every year.

Verfiability

Means when different defen People reach an agreement than an event, account or fransection is Faithfully represented.

Timeliness

Having information avaibbe to decision mateers on time.

Understandability

Information is understandable when it is classided, character ised and persented clearly.

Relevance

Information that can influence economic decisions made by users.

Predictive value

Information used to make perdicates as to what is likely to happen in the near future based on the past and present.

Confirmatory value

Information providing feedback which aids in confirming previous decisions.

Materiability

Information is material if its size or nature is important enough to influence the decisions being made; otherwise it is useless or even misleading.

Faithful representation

Assurance to the user that the information persented is complete, without bias and neutral.

Complete

All necessary information about an item included in the faithful representation.

Neutral

The information being presented is without bias or manipulation.

Enhancing Qualitative charactristics

Qualities that improve the quality of info, including comparability, verifiability, timeliness, and understandability.

Comparability

Quality of information that enable users to identify similarities and differences between two sets of Financial data.

Consistency

Requires the use of same accounting Principles and Polices every year.

Verifiability

Means when different people reach an agreement than an event, account or transection is faithfully represented.

Timeliness

Having information available to decision makers on time.

Understandability

Information that is classifed, character ised and persented clearly.