Accounting Standards – CA Foundation Accounts Study Material

Accounting Standards – CA Foundation Accounts Study Material is designed strictly as per the latest syllabus and exam pattern.

Accounting Standards – CA Foundation Accounts Study Material

Question 1.
Need of Accounting Standards
Answer:
Need of Accounting Standards:

  • Accounts gives information to various groups.
  • The financial statement can serve the interest of different interest groups only if there is uniformity and full disclosure of relevant information.
  • There are various alternatives regarding accounting treatment and valuation norms which may be used by an entity.
  • Hence AS tries to reduce this alternative by allowing only those alter-natives which fulfils the basic qualitative characteristics of true and fair financial statements and lays down the minimum information to be disclosed and manner of disclosure.

Accounting Standards – CA Foundation Accounts Study Material

Question 2.
Objectives & advantages of Accounting Standards.
Answer:
Objectives & advantages of Accounting Standards:

  • An Accounting Standard is a selected set of accounting policies or broad guidelines regarding the principles and methods chosen out of several alternatives.
  • The main objectives of Accounting Standards is to establish standards which have to be complied with to ensure that financial statements are prepared in accordance with generally accepted accounting principles.
  • Accounting standard seek to suggest rules and criteria of recognition, measurement & disclosure.
  • These standards harmonize the diverse accounting policies and practices at present in use in India.
  • The main advantage of setting accounting standards is that the adoption and application of Accounting Standards ensure uniformity, comparability and qualitative improvement in the preparation and presentation of financial statements.

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