State the characteristics of accounting information.
Characteristics of accounting information are as follows:
- Understandability: Information should be presented in a simple method for easy understanding of the users.
- Reliability: Accounting information should be reliable, verifiable and based on facts. It should be free from bias.
- Relevance: Relevant information should be available on time and assist in influencing the user’s decision to form prediction about the outcomes.
- Comparability: Financial statements should contain figures for the current year to compare with the previous year’s figures of business and other firm’s figures.
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