BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It is historical in nature
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It results from inexact and approximate measures
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It is factual, so it does not require judgement to prepare
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It is enhanced by management’s explanation.
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Detailed explanation-1: -Correct answer is option ‘B’. Can you explain this answer?, a detailed solution for Financial accounting information is characterized by all of the following excepta)It is historical in nature. b)It is factual, so it does not require judgement to prepare.
Detailed explanation-2: -Qualitative characteristics of accounting information that impact how useful the information is: Verifiability. Timeliness. Understandability.
Detailed explanation-3: -It is a principle of accounting but not the part of qualitative characteristics because it helps the company to make decisions by considering all factors. Hence, (a) Materiality is the correct option.
Detailed explanation-4: -Future transactions do not have any relevance in accounting.
Detailed explanation-5: -Financial accounting is the process of recording, summarizing, and reporting a company’s business transactions through financial statements. These statements are: (1) the income statement, (2) the balance sheet, (3) the cash flow statement, and (4) the statement of retained earnings.