Qualitative Characteristics of Accounting Information

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The information must be comparable to the financial information presented for other accounting periods so that users can identify trends in the performance and financial position of the reporting entity. The qualitative characteristics of accounting information are important because they make it easier for both company management and investors to utilize a companys financial statements to make well-informed.


Qualitative Characteristics Of Accounting Information

Qualitative characteristics of accounting information that impact how useful the information is.

. The qualitative characteristics of financial statements include understandability relevance reliability and comparability. Qualitative observation depends heavily on a persons senses. Using these senses researchers can gather very specific data and report on characteristics in place of measurements.

Normally an accounting period consists of a quarter six months or a year depending on the needs of business entity and its stakeholders. Importance of time period assumption The time period assumption enables business organizations to stop and see how successful they have been in achieving their objectives during a particular period of time. The qualitative approach is effective since the statement of the problem refers to qualitative infinite aspects ie unquantifiable variable.

Qualitative observation is the act of gathering information for research through subjective methods. Taste sight hearing touch and smell. It answers the How aspect of research characteristics to which it is not possible to assign numerical figures.


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