COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The information must be latest and up-to-date.
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The information must be prepared on time.
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The information must be included with the cost of acquisition.
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The information must be understandable by the managers.
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Detailed explanation-1: -Timeliness is how quickly information is available to users of accounting information. The less timely (thus resulting in older information), the less useful information is for decision-making. Timeliness matters for accounting information because it competes with other information.
Detailed explanation-2: -The timeliness of presenting financial statements to the public is a signal from the company that shows the existence of useful information to meet investors’ needs in making decisions. The benefits of financial statements will be reduced if the report is not timely (lAI 2002).
Detailed explanation-3: -The characteristic of timeliness means that the accounting information is available to all stakeholders in time for decision-making purposes.
Detailed explanation-4: -Timeliness of information increases the management accounting possibilities to inform about the latest events and forwards managerial decisions. Management accounting may provide infor-mation aggregated in various ways: consumma-tely raw primary data, aggregated with regard to time or goal.