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Meaning and Objectives of Accounting — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountMeaning and Objectives of Accounting3 Marks
Question
"Accounting information should be comparable”. Do you agreewith this statement? Give two reasons.
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Answer

Yes, accounting information should be comparable, because
  1. Comparability is needed to make inter-firm comparisons, i.e. to find out how a firm has performed as compared to the other firms,
  2. Comparability is needed to make inter-period comparison, i.e. to find out how it has performed as compared to the previous years.

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