Question

Explain various attributes of accounting.

Answer 1

Dear Student,
Here is your answer,

There are four (4) qualitative characteristics/ attributes of accounting information that serve as the basis for decision making purposes in accounting:

• Relevance: information makes a difference in decision making
• Reliability: information is verifiable, factual, and neutral
• Comparability: information can be used to compare different entities
• Consistency: information is consistently presented from year to year

These qualities make accounting information understandable and useful for decision and reporting purposes: the goal of financial reporting is to provide useful information to current and potential investors, creditors, and other users of accounting information (e.g., government, standard-setting bodies) to make investment, credit, and other decisions.

Regards.