CMA Intermediate · Corporate Accounting and Auditing · Conceptual Framework
Under the Conceptual Framework for Financial Reporting under Ind AS, which pair of qualitative characteristics are the fundamental ones that useful financial information must have?
The fundamental qualitative characteristics are relevance and faithful representation. Financial information must have both to be useful. Comparability, verifiability, timeliness and understandability only enhance the usefulness of information that is already relevant and faithfully represented.
- AComparability and verifiability
- BRelevance and faithful representationCorrect
- CTimeliness and understandability
- DVerifiability and timeliness
Explanation
Paragraph 2.4 states that to be useful, information must be relevant and faithfully represent what it purports to represent. Comparability, verifiability, timeliness and understandability are enhancing characteristics, so options with these are wrong.
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