Question

The enhancing qualitative characteristic of understandability means that information should be understood by:

a. CPAs.
b.Those who are experts in the interpretation of financial information. c. Those who have a reasonable understanding of business and economic activities.
d. Financial analysts.

Answer 1

It is those who have a reasonable understanding of business and economic activities.

Step-by-step explanation:

Financial information are produced for the information of the users in order to enhance their decision making ability.

In order to enhance understandability of the users, financial information should include all the necessary disclosures and be presented in a clear terms such that those who have a reasonable understanding of business and economic activities with little or no assistance f from a financial experts, can read and understand.