The Two Primary Decision-Specific Qualities That Make Accounting Information Useful Are | MCQ Question Answer

The correct answer is (D), as Relevance and Reliability are the most primary qualities of accounting information in which Users of Financial Statements or Accounting Information are most interested as they need relevant and reliable information to make decision, i.e., whether to invest in the shares of company or not, the investors are interested in the relevant information i.e, dividend policy, return on equity, etc., and the reliable information i.e., the company paid dividend to its shareholders annually, company make payments regularly, etc.

Relevance is the most important Accounting Concept which states that accounting information should be relevant to concerned parties in decision making purposes. Relevant accounting information is required by users of accounting information to make financial decision.

 

Reliability accounting concept states that information presented in the accounting records is trustable. Users of financial information get the reliable information from accounting records which is consistent and unbiased throughout the accounting periods. Reliability of accounting information increases with supporting documents provided for recording accounting information.