How do the three basic accounting criteria help "accounting make sense?"

3 Basic Accounting Criteria:

1. Accounting information should be relevant. Accounting reports should provide information that describes as accurately and completely as possible the status of assets, liabilities, and owners' equity, the results of operations, and cash flows.

2. Accounting information should be objective. The amounts reported should not be biased, particularly by the subjective judgments of management. (The FASB uses the term reliable in the same way we use objective.)

3. The reporting of accounting information should be feasible. Its value should exceed the cost of collecting and reporting it.

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