Question

answer is following short questions :

1) The accountants provide useful information and the users need something else, explain?

2) According to accounting income should have high quality to be useful, explain?

3) The accounting standards and procedures are in a good situation to achieve accounting objective, but still users looking for more, explain?

Answer 1

1) The process of accounting followed by the accountant is as prescribed by the accounting standards and the guidelines issued by the Professional body of Accounting of the country.Such accounting proess results in the information of profitabilty (income tatement) and financial position (balance sheet) of the business.. but, the users to whom this information is presented may be interested in some detailed analysis of the specific part or components of the information. for example, a lendor may only be interested in accessing the solvency of the business. So, such accounting information provided by the business is further processed by them to find out the required information of their interest.

2) Accounting income, being just a positive figure is not enough. Whatever we calculate as profit/income should be compared and analysed keeping several other facts, figures in consideration. profit should be compared with sales , capital invested and assets of the business. If in these comparisons it is better than the competative businesses or industry standards, then only it may be termed as satisfactory, else we should focus on improvement areas.

3) Accounting standards and procedures followed by a business can provide us accounting information in a standrdised format whereas user require some spcific kind of information ccording to their area of interest in finncial statements, so to meet that requirement, they have to dig deeper into the annual report or accounting details.

(Consice answers given for the questions as required. Hope it helps.)