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Doubtfulness In Financial Accounting

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Question 1 (a) Objectivity An accountant has to practice some ethical rules such as objectivity. Based on my own understanding, objectivity should claim as solid evidence that can be prove to the accountants to convince them to agree on this rule as a whole. In accounting, there are fixed procedures and methods for the accountants to follow in order to carry out the accurate financial position of a business. For instance, to judge whether how much a company earned or worth, the accountants will have to do adjustment and calculate all the transactions made before the accounting period closed. Accountants simply do not play guessing game as everything they record in accounting book has to be precise and proven. Integrity Without doubtfulness, …show more content…

This can allow the company to know how much capital the company owned. Hence, the company will use the capital wisely. For example, with the capital hold, the firm will decide how much production should produce or how much the firm can spend on advertisement and others. Additionally, a firm is aware of the transactions which are on account. The firm can easily trace back the entries made and collect the payment by referring to the ledger. This indicates that not only financial position requires basic accounting rules, so do ledger and …show more content…

First of all, comparability is needed in financial information so that the transaction recorded is able to compare on the similarities and differences. Furthermore, the category of a product such like asset, liabilities, expenses and others have to put in the same account within the accounting period and across companies so that the financial information can be compared. For instance, AMC Ent bought inventories and treated it as an asset, the same inventories bought in the same accounting period has to be treated as an asset also instead of as

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