Accounting concepts, Accounting Basics

Assignment Help:

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.


Related Discussions:- Accounting concepts

Continuity concept, Accounting supposes that the business as an accounting ...

Accounting supposes that the business as an accounting entity will continue to operate for a long time in the future, unless there is superior evidence to the contrary. The enterpr

Service revenue earned on account, Service revenue earned on account M...

Service revenue earned on account Metro performed courier deliverance services for a customer who agreed to pay USD 900 at a later date. The company approved credit rather tha

Accounting and its functions, Accounting is frequently termed as the langua...

Accounting is frequently termed as the language of business. The fundamental function of any language is to function like a means of communication. In this circumstance, the reason

What is an accrual?, Accrual basis of accounting means that the costs or re...

Accrual basis of accounting means that the costs or revenues of events are renowned in the period in which they happens; by the cash flows may take place in another accounting peri

Explain about debits and credits, Q. Explain about debits and credits? ...

Q. Explain about debits and credits? Accountants utilize the term debit instead of saying place an entry on the left side of the T-account. They utilize the term credit for Pla

Using 2012 as the base year, Using 2012 as the base year, prepare a trend a...

Using 2012 as the base year, prepare a trend anslysis for the data that follow, and tell whether the results suggest a favorable or unfavorable trend.(round to one decimal place.

Periodicity concept, Though the results of the operations of an exact enter...

Though the results of the operations of an exact enterprise can be termed as precisely only after the business has ceased to control, its assets have been sold off and responsibili

Holding companies, how the minority interest will be calculated?

how the minority interest will be calculated?

Determine the additional cash, Determine the additional cash a company coul...

Determine the additional cash a company could obtain from its working capital accounts if it can improve its average collection period by three days and inventory turnover by 0.5 t

Income statements - service and merchandising company, Q. Income statements...

Q. Income statements - Service and merchandising company? We evaluate the main divisions of an income statement for a service company with those for a merchandising company. To

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd