Identify and describe any 5 qualitative characteristics of an accounting system

i. Relevance

This refers to how useful the information is in making financial decisions. Accounting data is useful if it
can provide useful information about previous events and aid in the prediction of future occurrences or
the taking of action to address potential future events.

ii) Reliability

To make informed decisions about a company's earning potential and financial status, it is necessary to
have access to reliable data. Eisenberg Eric M (2007) stated that when the information effects their
economic decisions, the information must be relevant to the demands of the users. This could include
reporting information that is particularly relevant, or information whose omission or misstatement could
have an impact on users' economic decisions.

iii) Timeliness

Timeliness is how quickly information is available to users of accounting information. The less timely
(and thus older) information is, the less beneficial it is for making decisions. Accounting information
must be timely since it competes with other information. Users of financial statements, for example,
would have a difficult time determining how well a company is doing in the present if financial
statements were issued a year after the accounting period ended.

iv) Understandability

Understandability is the degree to which information is easily understood.. It is highly beneficial to have
information that is understandable to the average user of financial statements. In an attempt to hide their
underperformance, poorly performing corporations frequently utilize a lot of jargon and complicated
terminology in their annual reports.

v) Comparability

The degree to which accounting rules and procedures are consistently applied from one period to the next
is referred to as comparability.. When financial statements are comparable and accounting rules and
processes are executed consistently throughout each accounting period, users can make informed
judgments about the company's patterns and performance over time. The ease with which a company's
financial statements may be compared to those of other companies is sometimes referred to as
comparability.
List and explain any 5 objectives of accounting

a) Identification and recording of transactions

Accounting's main goal is to detect financial transactions and record them in a methodical manner in the
books of accounts. As a result, the genuine nature of each and every transaction may be determined
without much effort on the part of the user. Radin Beryl A (2006) argued that , with this goal in mind,
transactions are first documented in a general and a special journal, and then numerous accounts are
permanently maintained in the ledger.

b) Ascertainment of results

Every company wants to know how well it is doing at the conclusion of a given period. An income
statement may be prepared with the use of ledger account balances of revenue type to determine the
amount of profit or loss for a specific period of time for a business concern. An income and expenditure
account or statement can also be used to determine whether a non-trading company has a revenue surplus
or deficit for a certain time.

c) Ascertainment of financial affairs

Another significant purpose of accounting is the determination of debts-liabilities, property, and assets, or
the overall financial affairs of an organization at a certain period. A balance sheet can be used to
determine the financial state of a company at a specific date. The balance sheet is a statement of a
company's assets and liabilities as of a specific date.

d) Keeping accounts of cash

The cash book is an important part of the accounting books. This book keeps track of all cash receipts and
payments. This book contains a number of daily cash receipts, payments, cash in hand, and cash at the
bank. By keeping a scientific and precise cash book, fraud, forgery, and money misappropriation are
reduced.

e) Control over assets and liabilities

The true state of debts-liabilities, property, and assets can be determined by keeping accurate records. A
businessman can take the necessary actions to regulate the amount of assets that are reduced and the
amount of liabilities that are increased. A businessman must purchase numerous assets such as land,
buildings, machinery, and so on in order to run a profitable firm. Along with the acquisition of assets, he
will have to deal with numerous debts and liabilities such as accounts payable, notes payable, loan, bank
overdraft, and so on.

References

Eisenberg Eric M . 2007. Strategic ambiguities: Essays on communication, organization, and identity.
Thousand Oaks, CA: Sage.

Locke Edwin A. Latham Gary P . 1990. A theory of goal setting and task performance. Englewood Cliffs,
NJ: Prentice Hall.

Moe Terry . 1980. The organization of interests: Incentives and the internal dynamics of political interest
groups. Chicago, IL: University of Chicago Press.

Radin Beryl A . 2006. Challenging the performance movement: Accountability, complexity, and
democratic values. Washington, DC: Georgetown Univ. Press.

Romzek Barbara S. Dubnick Melvin J . 1987. Accountability in the public sector: Lessons from the
challenger tragedy. Public Administration Review