Accounting concepts, Accounting Basics

In earlier section, we had illustrated accounting as the language of business. Along with language, accounting has several dialects. There are dissimilarities in terminology. In dealing along with the framework of accounting theory, one is confronted along with a critical problem occurring from differences in terminology. Various words and terms have been used through various writes to express and describe similar concept or notion. Hence, confusion abounds in the literature insofar as the theoretical framework is involved.

The different terms used for illustrating the fundamental concepts are: postulates, concepts, propositions, fundamental assumptions, fundamentals, underlying principles, rules, conventions, doctrines, etc. Though each of these terms is able of precise definition, common usage by the profession of accounting has served to provide them loose and overlapping meanings. Similar concept has been described through one author as a concept and through another as a convention. To acquire the other instance, the concept implied in conservatism has been labeled through one author as a modifying convention, through the other as a principle, and through yet the other as a doctrine. The broad diversity in terminology to state the fundamental framework can only serve to confuse the learner.

Without falling in the trap of this terminological maze, we will describe below, a few broadly recognized concepts and we identify all of these concepts. We do feel, though, that several of these concepts have a better claim to be termed as concepts, whereas the rest must be termed as conventions. Fundamental accounting concepts are broad, general assumptions such underlie the periodic financial accounts of business enterprises. The cause why several of these concepts must be termed as concepts is that they are fundamental assumptions and have a direct bearing on the quality of financial accounting information. The alteration of any of the fundamental concepts or postulates would change the entire nature of financial accounting.

Posted Date: 4/2/2013 7:05:51 AM | Location : United States







Related Discussions:- Accounting concepts, Assignment Help, Ask Question on Accounting concepts, Get Answer, Expert's Help, Accounting concepts Discussions

Write discussion on Accounting concepts
Your posts are moderated
Related Questions
in cash flow statement, deductions from cash expences and payments to creditor. how do you get this answer

Q. Illustrate about corporation? A corporation is an incorporated business under the laws of a state and owned by a few stockholders or thousands of stockholders. Approximately

Investment banking is a is an instrument which is used by the financial organization to take a improved investment decision like issuing IPO stocks bond etc.

Can a copy constructor accept an object of similar class as parameter, in place of reference of the object?

ABC's Product information Current Product Expansion Product (estimate) Selling Price $14.50 $ Units produced and expected to be sold 80,000 5,000 Machine Hours 40,000 5,00

Function and scope of the Accounting Standards Board: The major function of ASB is to originate accounting standards so that the Council of the Institute in India may set up su

The capital accounts of Hawk and Martin have balances of $160,000 and $140,000, respectively, on January 1, 2010, the beginning of the current fiscal year. On April 10, Hawk inve

A view organizes diagrams into logical groups to explain a particular aspect of the system. It is the abstraction of the system prepared is such a way as to give a perspective of a

FICA Tax (Social Security) Both the employee and the employer contribute equally. OASDI has a Taxable Wage Base that is the maximum amount of earnings during a calendar y

How to prepare the worksheet  Look carefully at worksheet in the text. Remember that it is an informal working paper used to prepare financial statements. Place transparenci