File Name: account concept and conventions in .zip
- Accounting Concept and Principles
- Accounting Conventions: 4 Accounting Conventions
- Accounting Principles and Concepts Meaning and Scope of Accounting
- ) Sheet 1 - Accounting Concepts Conventions
Accounting Concept and Principles
It is referred to as "Journal. It is known as "Ledger. Functions of AccountingFrom the definition and analysis of the above the main functions of accounting can be summarized as: 1 Keeping systematic record of business transactions.
Objectives of Accounting 1 Providing suitable information with an aim of safeguarding the interest of the business and its proprietors and others connected with it. Definition of BookkeepingBookkeeping may be defined as "the art of recording the business transactions in the books of accounts in a systematic manner. His work is primarily clerical in nature. On the other hand, Accounting is primarily concerned with the recording, classifying, summarizing, interpreting the financial data and communicating the information disclosed by the accounting records to those persons interested in the accounting information relating to the business.
Limitations of Accounting 1 Accounting provides only limited information because it reveals the profitability of the concern as a whole. Qualitative information is not taken into account. It provides only a post mortem record of business transactions.
Branches of AccountingThe main function of accounting is to provide the required informations for different parties who are interested in the welfare of that enterprise concerned. In order to serve the needs of management and outsiders various new branches of accounting have been developed. The following are the main branches of accounting: 1 Financial Accounting. It is a systematic procedure for determining the unit cost of output produced or service rendered.
Accounting PrinciplesVarious accounting systems and techniques are designed to meet the needs of the management.
The information should be recorded and presented in such a way that management is able to arrive at right conclusions. The ultimate aim of the management is to increase profitability and losses. In order to achieve the objectives of the concern as a whole, it is essential to prepare the accounting statements in accordance with the generally accepted principles and procedures. The term principles refers to the rule of action or conduct to be applied in accounting.
Accounting principles may be defined as "those rules of conduct or procedure which are adopted by the accountants universally, while recording the accounting transactions.
Accounting Concepts. Accounting Conventions. Accounting ConceptsAccounting concepts mean and include necessary assumptions or postulates or ideas which are used to accounting practice and preparation of financial statements. Accounting ConventionsAccounting Convention implies that those customs, methods and practices to be followed as a guideline for preparation of accounting statements. The accounting conventions can be classified as follows: 1 Convention of Disclosure.
The classification of accounting concepts and conventions can be explained in the following pages. Accounting Concepts 1 Entity Concept: Separate entity concept implies that business unit or a company is a body corporate and having a separate legal entity distinct from its proprietors. The proprietors or members are not liable for the acts of the company. But in the case of the partnership business or sole trader business no separate legal entity from its proprietors.
Here proprietors or members are liable for the acts of the firm. As per the separate entity concept of accounting it applies to all forms of business to determine the scope of what is to be recorded or what is to be excluded from the business books. For example, if the proprietor of the business invests Rs. On withdrawal of any amount it will be debited in cash account and credited in proprietor's capital account.
In conclusion, this separate entity concept applies much larger in body corporate sectors than sole traders and partnership firms.
The dual aspect concept is the basis of the double entry book keeping. Accordingly for every debit there is an equal and corresponding credit. On the other hand, the term liability denotes the funds provided by the creditors and debenture holders against the assets of the business.
The term assets represents the resources owned by the business. For example, Mr. Thomas Starts business with cash of Rs. In other words, the business acquires assets of Rs. Being a business in continuous affairs for an indefinite period of time, the proprietors, the shareholders and outsiders want to know the financial position of the concern, periodically.
Thus, the accounting period is normally adopted for one year. At the end of the each accounting period an income statement and balance sheet are prepared.
This concept is simply intended for a periodical ascertainment and reporting the true and fair financial position of the concern as a whole.
This concept assumes that business concern will continue for a long period to exit. In other w. This assumption implies that while valuing the assets of the business on the basis of productivity and not on the basis of their realizable value or the present market value, at cost less depreciation till date for the purpose of balance sheet. It is useful in valuation of assets and liabilities, depreciation of fixed assets and treatment of prepaid expenses. And this cost is the basis for subsequent accounting for the asset.
For accounting purpose the market value of assets are not taken into account either for valuation or charging depreciation of such assets. Cost Concept has the advantage of bringing objectivity in the preparation and presentation of financial statements.
In the absence of cost concept, figures shown in accounting records would be subjective and questionable. But due to inflationary tendencies, the preparation of financial statements on the basis of cost concept has become irrelevant for judging the true financial position of the business. This concept excludes those transactions or events which cannot be expressed in terms of money. For example, factors such as the skill of the supervisor, product policies, planning, employer-employee relationship cannot be recorded in accounts in spite of their importance to the business.
This makes the financial statements incomplete. The chief aim of the business concern is to ascertain the profit periodically. To measure the profit for a particular period it is essential to match accurately the costs associated with the revenue. Thus, matching of costs and revenues related to a particular period is called as Matching Concept. According to this concept, revenue is the gross inflow of cash, receivables or other considerations arising in the course of an enterprise from the sale of goods or rendering of services from the holding of assets.
If no sale takes place, no revenue is considered. However, there are certain exceptions to this concept. According to this concept, revenue recognition depends on its realization and not accrual receipt. Likewise cost are recognized when they are incurred and not when paid. The accrual concept ensures that the profit or loss shown is on the basis of full fact relating to all expenses and incomes.
In fact, due to inflationary pressures, the value of rupee will be declining. Under this situations financial statements are prepared on the basis of historical costs not considering the declining value of rupee.
Similarly depreciation is also charged on the basis of cost price. Thus, this concept results in underestimation of depreciation and overestimation of assets in the balance sheet and hence will not reflect the true position of the business. Accounting Conventions 1 Convention of Disclosure: The disclosure of all material information is one of the important accounting conventions. According to this conventions all accounting statements should be honestly prepared and all facts and figures must be disclosed therein.
The disclosure of financial informations are required for different parties who are interested in the welfare of that enterprise. Thus convention of disclosure is required to be kept as per the requirement of the Companies Act and Income Tax Act. This principle is" often described as "anticipate no profit, and provide for all possible losses. For example, under this convention inventory is valued at cost price or market price whichever is lower.
Similarly, bad and doubtful debts is made in the books before ascertaining the profit. Under this convention alternative improved accounting policies are also equally acceptable. In order to measure the operational efficiency of a concern, this convention allows a meaningful comparison in the performance of different period.
The evaluation and decision of material or immaterial depends upon the circumstances and lies at the discretion of the Accountant.
Download pdf. Remember me on this computer. Enter the email address you signed up with and we'll email you a reset link. Need an account? Click here to sign up.
Accounting Conventions: 4 Accounting Conventions
Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance.
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 uses a formalised and regulated system that follows standardised principles and procedures.
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. That is, while making accountancy records, care should be taken to disclose all material information.
Accounting Concepts, Conventions,. Bases & Policies. • Concepts vs Conventions. Concepts are the basic ideas, the theories on how and why certain.
Accounting Principles and Concepts Meaning and Scope of Accounting
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.
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.
Accounting concepts, conventions, assumptions and principles suggest logical and generally accepted accounting treatments and principles.
) Sheet 1 - Accounting Concepts Conventions
Нам нужен этот предмет, - сказал Фонтейн. - Где сейчас находится Халохот. Смит бросил взгляд через плечо. - Сэр… видите ли, он у. - Что значит у вас? - крикнул директор. Это могло оказаться лучшей новостью за весь день.
- Я мог бы предложить вам более привлекательную идею. - Ролдан был человек осторожный, а визит в полицию мог превратить его клиентов в бывших клиентов. - Подумайте, - предложил. - Раз у человека в паспорте был наш номер, то скорее всего он наш клиент. Поэтому я мог бы избавить вас от хлопот с полицией.
ГЛАВА 91 В соборе всегда ночь. Тепло дня здесь сменяется влажной прохладой, а шум улицы приглушается мощными каменными стенами. Никакое количество люстр под сводами не в состоянии осветить бесконечную тьму. Тени повсюду. И только в вышине витражи окон впускают внутрь уродство мира, окрашивая его в красновато-синие тона. Севильский собор, подобно всем великим соборам Европы, в основании имеет форму креста. Святилище и алтарь расположены над центром и смотрят вниз, на главный алтарь.
Accounting Concepts and. Conventions. CHAPTER AT A GLANCE. S. No. Topic. Important Highlights. 1. Definition. As per the definition of American Institute of.
Шифровалка умирала. То же самое будет и со мной, - подумала. Сьюзан вспомнила о единственном остающемся выходе - личном лифте Стратмора. Но она понимала, что надежды нет: электроника вряд ли уцелела после катастрофы. Двигаясь в дыму, она вдруг вспомнила слова Хейла: У этого лифта автономное электропитание, идущее из главного здания. Я видел схему.
Мелкая любезность, которую он оказал Стратмору, забрав личные вещи Танкадо, вылилась в поиски таинственного кольца, как в известной игре, где нужно находить спрятанные предметы. Дэвид только что позвонил Стратмору и рассказал о немецком туристе. Новость не обрадовала коммандера. Выслушав подробности, он долго молчал. Дэвид, - сказал наконец Стратмор мрачным голосом, - обнаружение этого кольца - вопрос национальной безопасности.
На лице привратника появилась обиженная гримаса, словно Беккер чем-то его оскорбил. - Рог aqui, senor. - Он проводил Беккера в фойе, показал, где находится консьерж, и поспешил исчезнуть. Фойе оказалось помещением с изысканной отделкой и элегантной обстановкой. Испанский Золотой век давным-давно миновал, но какое-то время в середине 1600-х годов этот небольшой народ был властелином мира. Комната служила гордым напоминанием о тех временах: доспехи, гравюры на военные сюжеты и золотые слитки из Нового Света за стеклом.
СЛЕДОПЫТ ОТКЛЮЧЕН Следопыт отключен. У нее даже перехватило дыхание.
Она снова начала нажимать кнопки и снова услышала за дверью этот же звук. И вдруг Сьюзан увидела, что кнопка вызова вовсе не мертва, а просто покрыта слоем черной сажи. Она вдруг начала светиться под кончиком пальца. Электричество .