Define the qualitative characteristics of relevance and faithful representation, include definitions of the ingredients of each and also specify reason for them being more important.

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Relevance versus Faithful RepresentationYou are listening to two accounting majors, both of whom are seniors.They are debating the merits of having relevant versus faithfullyrepresented accounting information for external decision making. One student states, "In my decision making, if given a choice betweenrelevant and representationally faithful accounting information, I wouldprefer to have relevant information." The other student replies, "Nonsense! If you cannot rely on the information, then of what use is it?"Required: Based on your knowledge of the FASB's Conceptual Framework, define the qualitative characteristics of relevance and faithful representation.Include definitions of the ingredients of each. Which do you think ismore important?

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Chapter 2, Problem 6C

To determine

Define the qualitative characteristics of relevance and faithful representation, include definitions of the ingredients of each and also specify reason for them being more important.

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Relevance versus Faithful RepresentationYou are listening to two accounting majors, both of whom are seniors.They are debating the merits of having relevant versus faithfullyrepresented accounting information for external decision making. One student states, "In my decision making, if given a choice betweenrelevant and representationally faithful accounting information, I wouldprefer to have relevant information." The other student replies, "Nonsense! If you cannot rely on the information, then of what use is it?"Required: Based on your knowledge of the FASB's Conceptual Framework, define the qualitative characteristics of relevance and faithful representation.Include definitions of the ingredients of each. Which do you think ismore important?

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