BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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completeness, neutrality and free from error
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predictive, confirmatory value and cost
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timeliness, understandability and neutral
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comparability, verifiability and materiality
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Detailed explanation-1: -To be a perfectly faithful representation, a depiction would have three characteristics. It would be complete, neutral and free from error.
Detailed explanation-2: -Faithful representation means a depiction which is complete, neutral and free from error. Completeness means that all the information that a user needs to understand the economic phenomena is included; Neutrality means that the representation is unbiased, it’s neither overly optimistic nor overly pessimistic.
Detailed explanation-3: -faithful representation is complete, neutral, and free from error. comparability tells users of the information that businesses utilize similar accounting practices. verifiability means that others are able to confirm that the information faithfully represents the economic activities of the business.
Detailed explanation-4: -Faithful representation is achieved when the financial information represents not just the legal form but the underlying economic substance of transactions. This is achieved when the information is complete, neutral and free from error.