Your doctor got to know that you are studying accounting and he has bought some shares from XYZ company. He received a lengthy financial report, so you doctor requests your advice as weather he should contact the company to complain that the financial information is not understandable. Advice your doctor by justifying with GAAP priniciple
Your doctor got to know that you are studying accounting and he has bought some shares from XYZ company. He received a lengthy financial report, so you doctor requests your advice as weather he should contact the company to complain that the financial information is not understandable. Advice your doctor by justifying with GAAP priniciple
Understandability is one of the four qualitative characteristics of financial accounting information. The other being relevance, reliability, timeliness, faithful representation, comparability and materiality. Understandability refers to the quality of financial information which makes it understandable by people with reasonable background knowledge of business and economic activities.
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