Attributes of Financial Statements Homework Help
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Financial statements are a collection of reports that usually include statement of retained earnings, income statements, balance sheets and cash flows of an organisation. These statements are audited by government agencies, firms, and accountants to ensure accuracy, to determine the ability of a business to generate cash, sources and uses of that cash, to track and investigate financial results and to derive financial ratios. The qualitative characteristics of the financial statements are nothing but its attributes which make financial information quite useful. The attributes of financial statements include the following- relevance, reliability, comparability, analytical representation, easiness, attractive, promptness. Attributes of Financial Statements Homework Help shall help you to know more about these characteristics.
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Attributes of Financial Statements
Financial statements provide information about various characteristics such as the position of the firm, various performance changes in the organisation. This is useful for making economic decisions that is helpful for organisations. This becomes easier for the users when the attributes of financial statements are known to them. A brief description about the attributes is given in the Attributes of Financial Statements Homework Help.
• Understand ability- This means that the statements should be presented in a simple way such that it is easily understandable and thus the utility of the financial statements can be enhanced.
• Relevance: This attribute ensures that the information provided through the financial statements to the users is relevant to their needs and it can be properly utilised.
• Reliability- When the information in the financial statements is free of material error and bias and not misleading, and then only it can be termed as reliable. For more details, students can refer Attributes of Financial Statements Homework Help.
• Comparability- This attribute makes sure that the financial statements of the current session can be compared to the previous session statements so that the users can identify the changes in the performance and other financial aspects.
• Analytical representation- The financial statement should be analysed in such a way that the similar type of information should be presented at the same place so that it will be helpful in data interpretation.
• Easiness- According to this attribute, the financial statements should be prepared in a simpler way with less calculation, less columns and small size. This will save time while preparing the statements.
• Attractive- The important details in the financial statements should be highlighted or underlined so that the reader can find it attractive and the important details can be found at once in such big statements.
• Promptness- The financial statements should be prepared and presented by the closure of the financial year. It should be very quick, prompt and accurate.
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