Which of the following is a critical characteristic of good information?

• A. Obsolescence
• B. Redundancy
• C. Ambiguity
• D. Relevance

Answer: (D)

Verified step by step guidance

1. Understand the concept of 'good information' in Financial Accounting. Good information is essential for decision-making and should possess certain critical characteristics.
2. Review the characteristics of good information. These typically include relevance, reliability, comparability, timeliness, and understandability.
3. Focus on the term 'relevance.' Relevance means that the information provided should be applicable and useful for the specific decision-making process or context.
4. Analyze the options provided: Obsolescence refers to outdated information, which is not useful; Redundancy refers to unnecessary repetition, which can lead to inefficiency; Ambiguity refers to unclear or vague information, which can cause confusion. None of these are characteristics of good information.
5. Conclude that relevance is the correct answer because it ensures that the information is meaningful and directly applicable to the user's needs in Financial Accounting.