Top Notch Accounting Information Should Be Comparable

To be comparable an accounting information should i.

Accounting information should be comparable. Information that is prepared using the same measurement techniques and reported in a similar fashion is considered comparable information. Comparability is the level of standardization of accounting information that allows the financial statements of multiple organizations to be compared to each other. This is a fundamental requirement of financial reporting that is needed by the users of financial statements.

In addition to usefulness accounting theory states that all accounting information should be relevant reliable comparable and consistent. Be free from error and bias a. This means that all financial statements need to be accurate.

Comparable accounting information helps in inter-firm comparisons. Accounting theory also states that all accounting information should be relevant reliable comparable and consistent. The ultimate goal of any set of accounting principles is to ensure that a companys financial statements are complete consistent and comparable.

To be comparable an accounting information should i 37. Comparable financial accounting information presents similarities and differences that arise from basic similarities and differences in the enterprise or enterprises and their transactions and not merely from difference in financial accounting treatment. Belong to a common period ii.

Do you agree with this statement. Ii iii and iv b. Use common unit of measurement iii.

The quality of information that enables users to identify changes in the economic phenomena over a period of time between two or more entities. Answer verified by Toppr. This helps in assessing viability and advantages of various policies adopted by different firms.