Accounting Multiple Choice Question – 8 January 2024

Information is relevant if it can make a difference in the decisions made by users.

According to the IASB’s Conceptual Framework, financial information can make a difference in decisions if it has which of the following features?

1. Predictive value
2. Comparative value
3. Historic value
4. Confirmatory value

Select ONE answer:

1. 1 and 3 only
2. 2 and 4 only
3. 1 and 4 only
4. 2 and 3 only

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – Financial information can make a difference to decisions if it has predictive value (it can be used to predict future outcomes) or confirmatory value (it provides feedback about previous evaluations).
4. Not correct

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