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[solution]: You are listening to two accounting majors, both of whom are seniors. They are debating the...


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You are listening to two accounting majors, both of whom are seniors. They are debating the merits of having relevant versus reliable accounting information for external decision making. One student states: “In my decision making, if given a choice between relevant and reliable accounting informa- tion, I would prefer to have relevant information.” The other student replies: “Nonsense! If you cannot rely on the infor- mation, then of what use is it?” Required Based on your knowledge of the FASB’s conceptual frame- work, define the qualitative characteristics of relevance and reliability. Include definitions of the ingredients of each. Which do you think is more important?        

 


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