Which of the following are considered qualitative characteristics of useful financial information per GAAP?

• A. Simplicity, affordability, consistency, and reliability
• B. Relevance, reliability, comparability, and consistency
• C. Affordability, accessibility, feasibility, and relevance
• D. Timeliness, clarity, affordability, and comparability

Answer: (B)

The correct choice identifies relevance, reliability, comparability, and consistency as qualitative characteristics of useful financial information according to GAAP. These characteristics help ensure that financial statements provide valuable information to users, enabling them to make informed decisions.

Relevance refers to the capacity of financial information to influence the decisions of users. If information is not relevant, it may not assist in making choices, rendering it useless. Reliability ensures that the information faithfully represents the financial situation, is verifiable, and is neutral—meaning it should not be biased. Comparability allows users to identify and understand similarities and differences between financial statements of different entities or different periods, enhancing the utility of the information. Lastly, consistency enables users to compare financial statements over time, learning from trends in a company's performance.

The other options contain terms like simplicity, affordability, and accessibility, which are not directly recognized as qualitative characteristics under GAAP. Instead, they relate more closely to factors influencing the usability and communication of financial information rather than its inherent usefulness and reliability as outlined in GAAP standards.