Friday, March 7, 2008

conventions of accounting?

Ans. conventions are notstrict rules but these are guidlines .

main convention of accounting

  1. convention of disclosure

according to this convention ,''business man show full information in his profit and loss account and balance sheet . He does not misguide by not giving information in his final account . He must disclosure all correct information not only in final account but all statements prepared by him.

2.convention of consistency

according to this convention ,''the rules , regulation , system & method of maintainging accounts must be consistt . it is because , it helps to comparison and result from information.

3. conventionn of conservatism

according to this convention ,'' anticipate all future loss and create reserve for them . but do not provide any estimation for future profit.

4. convention of materiality

convention of materiality is very good convention , it guides us that accountant should record only useful and valuable transaction and event . He must be avoid or ignor all unvaluable or useless transaction or event so that cost of recording will be minimize

About Accounting Education

An educational site with 2,000+ articles, solutions, video-guides and tutorials on all topics related to accounting and finance.

Get Update on Mobile

Type in your mobile phone web browser for free access anytime, from any place.The content is designed specifically for cell phones and mobile devices.

Contact Us

Contact us Send an Email Phone number and vCard LinkedIn profile Follow us on twitter