Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Useful Information

Financial Accounting

1. Introduction to Accounting

Useful Information

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Multiple Choice

Which of the following best describes 'useful information' in the context of a financial plan?

Information that is only historical and not forward-looking.

Information that is based solely on estimates and assumptions.

Information that is relevant and faithfully represents what it purports to represent.

Information that is complex and difficult to understand.

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Verified step by step guidance

Step 1: Understand the concept of 'useful information' in financial accounting. Useful information is defined as information that helps users make decisions. It must possess two fundamental qualities: relevance and faithful representation.

Step 2: Relevance means the information should be capable of influencing decisions by helping users predict future outcomes or confirm past decisions. It should be timely and applicable to the decision-making process.

Step 3: Faithful representation means the information should accurately depict the economic phenomena it is intended to represent. It should be complete, neutral, and free from error.

Step 4: Analyze the options provided in the problem. Historical information alone is not forward-looking and may lack relevance. Information based solely on estimates and assumptions may lack faithful representation. Complex and difficult-to-understand information may not be useful for decision-making.

Step 5: Conclude that the correct description of 'useful information' in the context of a financial plan is: 'Information that is relevant and faithfully represents what it purports to represent.' This aligns with the fundamental qualities of useful financial information.