Question

Gaurav & Sons follow the accounting standards completely.Which benefits he must ` be deriving by following the accounting standards? `​

Answer 1

Account Standards (AS) provides rule for standard treatment and record transaction.

Explanation:

Following are the benefits that Gaurav and sons must be deriving by following the accounting standards:-

1) Reliability:

Accounting statements make the statements trustworthy and reliable. There are many stakeholders and investors who base their decisions by relying on the financial statements.

2) Uniformity:

Accounting Standards helps attains the uniformity in accounting. It provides rules for standard treatment and recording of transactions and even have a standard format for financial statements. Those steps helps in achieving the uniformity.

3) Comparability:

As all the entities follow the same set of standards, their financial accounts to some extent become comparable.

4) Prevention of frauds and accounting manipulation:

Accounting Standards (AS) lay down the accounting principles that all entities must follow. these standards make it difficult for the management to misrepresent or commit any frauds with financial data.

5) Accountability