Question

Which qualitative characteristics of accounting information requires the use of common unit and common format of reporting?

Answer 1

'Comparability' characteristic of accounting information requires the use of common units and common format of reporting. It is the most important quality of accounting information. Comparability means accounting information of a current year can be comparable with that of the previous years. Comparability enables intra-firm and inter-firm comparison. This assists in assessing the outcomes of various policies and programmes adopted in different time horizons by the same or different businesses. Further, it helps to ascertain the growth and progress of the business over time and in comparison to other businesses.

Answer 2

'Comparability' characteristic of accounting information requires the use of common units and common format of reporting. It is the most important quality of accounting information. Comparability means accounting information of a current year can be comparable with that of the previous years.

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