CHAPTER 3

Question 1

Preparers of statements should not try to increase the
usefulness of the information to a few users to the detriment
of others who may have opposing interests

Answer 1

NEUTRALITY

Question 2

When in doubt, recognize all losses and recognize gain.

Answer 2

CONSERVATISM

Question 3

The description and numbers or figures must match what really existed or happened

Answer 3

FAITHFUL REPRESENTATION

Question 4

The older the information, the less useful.

Answer 4

TIMELINESS

Question 5

In case of conflict between economic substance and legal
form of a transaction, the economic substance shall prevail.

Answer 5

SUBSTANCE OVER FORM

Question 6

This enhancing qualitative characteristics implies consensus

Answer 6

VERIFIABILITY

Question 7

It is the ability to bring together for the purpose of noting
points of likeness and difference.

Answer 7

COMPARABILITY

Question 8

. The information should be presented in a manner that
facilitates understanding and avoids erroneous implication.

Answer 8

COMPLETENESS

Question 9

It is the capacity of the information to influence a decision.

Answer 9

RELEVANCE

Question 10

The financial statements shall be accompanied by notes to financial statements

Answer 10

COMPLETENESS

Question 11

This enhancing qualitative characteristics implies consensus

Answer 11

VERIFIABILITY

Question 12

Information that has no bearing on an economic decision to be made is useless

Answer 12

Relevance

Question 13

. Small expenditures for tools are expensed immediately

Answer 13

MATERIALITY

Question 14

There are no errors or omissions in the description of the phenomenon.

Answer 14

FREE FROM ERRORS

Question 15

It requires that users have some knowledge of the complex
economic activities of entities, the accounting process and the
technical terminology in the statements

Answer 15

UNDERSTANDABILITY