Free Guide to
Bookkeeping Concepts

Accounting Bookkeeping Concepts PDF Cover

Receive our free 18-page Guide to Bookkeeping Concepts (PDF) when you subscribe to our free newsletter.

You are already subscribed. This offer is not available to existing subscribers.
Step 2: Please check your email and click the confirmation link.


Isn't objectivity violated when estimates are used in bookkeeping and accounting?

The use of estimates does not necessarily violate objectivity. If it is not possible to determine the exact amount of an expense and/or liability within a reasonable time, estimates may be necessary. In that situation, objectivity is met when the estimated amounts are similar to the amounts that another professionally-trained person would also compute with the same available information.

The accounting principles, guidelines and characteristics often involve some degree of trade-offs. For example, a company's financial statements are expected to be both timely and precise. Unfortunately, achieving timeliness and relevance may require sacrificing some precision and reliability.