account concept and conventions in pdf

Account Concept And Conventions In Pdf

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Accounting concepts, conventions, assumptions and principles suggest logical and generally accepted accounting treatments and principles. These concepts are not hard and fast rules and should be used as general guidelines in applying and selecting appropriate accounting methods. It is equally important that accounting users should have a basic understanding of the accounting concepts to comprehend financial statements.

Accounting Concepts, Principles and Basic Terms

The worldview of accounting and accountants may certainly involve some unhelpful characters poring over formidable figures stacked up in indecipherable columns. Accounting is the language of business efficiently communicated by well-organised and honest professionals called accountants. The process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information. The art of recording, classifying, summarising in a significant manner and in terms of money, transactions and events which are, in part at least of financial character, and interpreting the results thereof. Recording every financial transaction is important to a business organisation and its creditors and investors.

Accounting Conventions: 4 Accounting Conventions

Conventions in accounting have been evolved and developed to bring about uniformity in the maintenance of accounts. Conventions denote customs or traditions or usages which are in use since long. To be clear, these are nothing but unwritten laws. The accountants have to adopt the usage or customs, which are used as a guide in the preparation of accounting reports and statements. These conventions are also known as doctrine. This convention requires that accounting statements should be honestly prepared and all significant information should be disclosed therein.

Accounting Concepts and Principles are a set of broad conventions that have been devised to provide a basic framework for financial reporting. As financial reporting involves significant professional judgments by accountants, these concepts and principles ensure that the users of financial information are not mislead by the adoption of accounting policies and practices that go against the spirit of the accountancy profession. Accountants must therefore actively consider whether the accounting treatments adopted are consistent with the accounting concepts and principles. In order to ensure application of the accounting concepts and principles, major accounting standard-setting bodies have incorporated them into their reporting frameworks such as the IASB Framework. In case where application of one accounting concept or principle leads to a conflict with another accounting concept or principle, accountants must consider what is best for the users of the financial information.

There are a number of conceptual issues that one must understand in order to develop a firm foundation of how accounting works. These basic accounting concepts are as follows:. Accruals concept. Revenue is recognized when earned, and expenses are recognized when assets are consumed. This concept means that a business may recognize revenue, profits and losses in amounts that vary from what would be recognized based on the cash received from customers or when cash is paid to suppliers and employees. Auditors will only certify the financial statements of a business that have been prepared under the accruals concept. Conservatism concept.


It is clear that non-monetary events cannot be recorded in the books of accounts. The transactions, events or assets which are expressed in terms of equivalent monetary value are recorded in the books of accounts. This concept does not recognise the realisable value, the replacement value of the real worth of an asset.


Accounting Principles and Concepts Meaning and Scope of Accounting

Notably, accounting concepts and conventions are employed in developing financial statements based on accuracy and consistency. While accounting concepts and conventions have a significant role in processing reliable and realistic financial information, the two terms are different. The difference between Accounting Concept and Convention is that Accounting concepts are the rules and regulations of accounting, while accounting convention is the set of practices discussed by the accounting bodies before preparing final accounts. The accounting concept is a theoretical statement.

Accounting Convention

Accounting may be defined as the process of recording, classifying, summarizing and interpreting the financial transactions and communicating the results there of to the persons interested in such information. GAAP Generally Accepted Accounting Principles : It is a Technical concept that describes the basic rules, concepts, conventions and procedures that represent accepted accounting practices at a particular time.

Беккер попробовал выбраться и свернуть на улицу Матеуса-Гаго, но понял, что находится в плену людского потока. Идти приходилось плечо к плечу, носок в пятку. У испанцев всегда было иное представление о плотности, чем у остального мира. Беккер оказался зажат между двумя полными женщинами с закрытыми глазами, предоставившими толпе нести их в собор.

 Как это тебе нравится. Он аккуратно размазал приправу кончиком салфетки. - Что за отчет. - Производственный.

Хотя Стратмор и сожалел о смерти своего молодого сотрудника, он был уверен, что ее можно отнести к числу оправданных потерь. Фил Чатрукьян не оставил ему выбора. Когда запыхавшийся сотрудник лаборатории безопасности завопил о вирусе, Стратмор, столкнувшийся с ним на лестнице служебного помещения, попытался наставить его на путь истинный.

Она быстро подняла глаза и увидела возвращающегося Грега Хейла. Он приближался к двери. - Черт его дери! - почти беззвучно выругалась Сьюзан, оценивая расстояние до своего места и понимая, что не успеет до него добежать.

Они не хотят и слышать о том, чтобы посадить меня в самолет. На авиалиниях работают одни бездушные бюрократы. У меня нет денег на новый билет. - Где твои родители? - спросил Беккер. - В Штатах.

Он заберет личные вещи Танкадо и вернется домой. Разве это не услуга. Сьюзан промолчала. Она поняла: все дело в деньгах.

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