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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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What is relevant accounting information? Identify and define the characteristics of relevant accounting information.

To determine

Define the relevant accounting information along with its characteristics.

Explanation

Relevance:

Relevance is a qualitative characteristic, which emphasizes that the financial statement prepared should indicate the affirmatory value or supporting value.

Characteristics of relevant accounting information are,

Predictive Value:

The predictive value is the net income value which helps the user to predict the future cash flows of the company

Confirmatory value:

Confirmatory value is the net income value which helps the investors to assess the future cash flows of the company...

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