(Qualitative Characteristics)Accounting information provides useful informatio

(Qualitative Characteristics)Accounting information provides useful information about business transactions and events. Those who provide and use financial reports must often select and evaluate ac- counting alternatives. The FASB statement on qualitative characteristics of accounting information exam- ines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade-offs or sacrifices among the characteristics of useful information. Instructions (a) Describe briefly the following characteristics of useful accounting information. (1) Relevance. (4) Comparabilit y . (2) Faithful r ep r esentation. (5) Consistenc y . (3) Understandabilit y . (b) For each of the following pairs of information characteristics give an example of a situation in which one of the characteristics may be sacrificed in r eturn for a gain in the othe r . (1) Relevance and faithful r ep r esentation. (3) Comparability and consistenc y . (2) Relevance and consistenc y . (4) Relevance and understandabilit y . (c) What criterion should be used to evaluate trade-o f fs between information characteristics?