Accounting concepts define the assumptions on the basis of which financial statements of a business entity are prepared.
The following are the widely accepted accounting concepts:
(a) Entity concept
(b) Money measurement concept
(c) Periodicity concept
(d) Accrual concept
(e) Matching concept
(f) Going Concern concept
(g) Cost concept
(h) Realisation concept
(i) Dual aspect concept
(j) Conservatism
(k) Materiality
Accounting principles are a body of doctrines commonly associated with the theory and procedures of accounting serving as an explanation of current practices and as a guide for selection of conventions or procedures where alternatives exist.”
Accounting conventions emerge out of accounting practices, commonly known as accounting principles, adopted by various organizations over a period of time.
There are three fundamental accounting assumptions:
(i) Going Concern
(ii) Consistency
(iii) Accrual
Qualitative characteristics are the attributes that make the information provided in financial statements useful to users. Understandability, Relevance, Reliability, Comparability, Materiality, Faithful Representation, Substance over Form, Neutrality, Prudence, Full, fair and adequate disclosure and Completeness are the important qualitative characteristics of the financial statements.
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Questions Solved:
What is Accounting Concepts
What is Accounting Principles
What is Accounting Conventions
What is Entity concept
What is Money measurement concept
What is Periodicity concept
What is Accrual concept
What is Going Concern concept
What is Cost concept
What is Realisation concept
What is Dual aspect concept
What is Conservatism
What is Consistency
What is Materiality
What is Fundamental Accounting Assumptions
What is Financial Statements
Qualitative Characteristics of Financial Statements
What is Substance Over Form
What is Neutrality
What is Prudence
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