Question

The financial information must be comprehensible or intelligible if it is to be useful. a. Comparability b. Understandability 21 c. Relevance d. Reliability

Answer 1

The said statement refers to Understandability.

• It refers to the idea of presenting financial data in a way where the user can readily understand and grasp it.
• If financial knowledge is to be valuable, it must be comprehensible or intelligible. As a result, the data should be delivered in a manner and language that a user can understand.
• Furthermore, heavy use of jargon should be discouraged, and abstract words and statements should be replaced with plain language wherever possible.