VCE 3/4 Accounting Characteristics

Timeliness

Providing information promptly to influence decisions; older information is less valuable.

Understandability

Financial information should be clear and concise for stakeholders with basic knowledge.

Relevance

Information impacting decisions by relating to financial choices, predicting outcomes, and providing feedback.

Faithful representation

Reported information accurately reflects real-world economic events, complete, error-free, and unbiased.

Verifiability

Ensuring knowledgeable, independent observers can agree on the faithful representation of events.

Comparability

Allowing users to identify similarities and differences among items for better analysis.

Reporting Period

Preparation of reports for specific periods to ensure comparability and calculate profit.

Accrual assumptions

Recognizing revenue when economic benefits can be measured and expenses when goods or services are consumed.

Entity

Distinct records for assets, liabilities, and activities separate from the owner and other entities.

Going-concern

Financial reports assume the entity will continue operating without imminent closure.