Question

Which Qualitative feature of accounting is reflected in the case-" Facilitates Intra firm & Inter Firm comparison."

1. Relevance
2. Comparability
3. Reliability
4. Understandability​

Answer 1

Answer:

Option 4

Explanation:

Among the various options given in question statement, the correct option is the last one.

In accounting, understandability means that the financial information being presented should be easy in understanding for the reader. It should be traceable and have enough details to satisfy the other person. This feature helps in the comparison of  Intra firm & Inter Firm accounting operations

Answer 2

The qualitative feature is comparability.

• Comparability of accounting represents the extent to which information provided in the financial statements is comparable across various businesses and time periods.
• Comparative financial statements are the tool which allow, over a time frame, the  comparisons of financial components of the firms.
• Inter-company comparison means a comparison of similar business units to discover a competitive place to increase the profitability and competitiveness of the business units being considered.  
• Therefore, inter-company competition is a effective method employed by an enterprise to compare its efficiency and financial results with those of similar businesses in the same market.