Explain the qualitative characteristics of accounting information - Bzziii.com

Explain the qualitative characteristics of accounting information

The following are the qualitative characteristics of accounting information:
  1. Reliability
  2. Relevance
  3. Understandability
  4. Comparability

Reliability: It implies that the client can depend on the bookkeeping data. All bookkeeping data is unquestionable and can be confirmed from the source record (voucher), viz. cash reminders, bills, and so forth Thus, the accessible data ought to be liberated from any blunders and unprejudiced.

Relevance: It implies that fundamental and suitable data ought to be effectively and convenient accessible and any unimportant data ought to be stayed away from. The clients of bookkeeping data need significant data for navigation, arranging and anticipating the future conditions.

Understandability: Accounting information should be presented in such a way that every user is able to interpret the information without any difficulty in a meaningful and appropriate manner.

Comparability: It is the main nature of accounting information. Similarity implies accounting information of a current year can be equivalent with that of the earlier years. Similarity empowers intra-firm and between firm examination. This helps with surveying the results of different strategies and projects took on in various time skylines by the equivalent or various organizations. Further, it assists with discovering the development and progress of the business over the long run and in contrast with different organizations.

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