ACCOUNTING CONCEPTS AND CONVENTIONS
CONTENT
- Meaning of Accounting Concepts
- Major Accounting Concepts
- Accounting Conventions
Meaning of Accounting Concepts
Accounting concepts which is also referred to as principles and fundamental accounting postulates, are rules adopted as guides to actions in preparation of accounting statements.
Major Accounting Concepts
The following are the major accounting concepts
1. Entity concept
This concept draws a distinction between the business and the owner. This concept states that the business is a personality of its own, which can sue and be sued in its own name and not in the name of the owner.
2. Going concern
This is an assumption that an organization will exist forever (at least in the force able future) except otherwise proved. This concept is the authority behind the recording of assets in the books where values of properties are extended into the future especially as concerning their benefits.
3. Money concept
This states that all financial transactions must be expressed with the currency in use in that location.
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