Question

Introduction to qualitative characteristics of accounting information

Answer 1

1 Reliability - - Accounting information must be reliable. It can be reliable only when it is free from material errors and bias. Transactions must be recorded faithfully and such transactions should be supported by documentary evidence.


2// Comparability- - It means that the users should be able to compare the accounting information of a enterprise with that of the other enterprises. The purpose of such comparisons is to evaluate their financial position, performance, changes etc..

3// Relevance - - To be useful, information must be relevant to the decisions making needs of the users. Information has the quality of relevance when it influence the economic decisions of the users by helping them to evaluate past, present and future events or confirming or correcting their past evaluations...