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

What is current ratio in terms of accounting, Q. What is current ratio in t...

Q. What is current ratio in terms of accounting? The current ratio specifies the short-term debt-paying ability of a company. To find the current ratio we divide current assets

Why accounting become too interesting, Has accounting become too interestin...

Has accounting become too interesting? In recent years, accounting has become front-page news and has been a key talking point among those connected with world of business. Reg

Explain in detail about the merchandise inventory, Explain in detail about ...

Explain in detail about the MERCHANDISE INVENTORY Cost of merchandise purchased during an accounting period is debited to Purchases account. To determine VALUE of the goods on

Meaning of periodic review, Ordering inventory at a regular and set time in...

Ordering inventory at a regular and set time interval

Adjustments for accrued items, A few account balances remain the same becau...

A few account balances remain the same because no adjustments have affected them. For illustration the balance in Accounts Payable doesn't change and is simply extended to the Adju

Scott manufacturing co.''s static budget at 10, Scott Manufacturing Co.'s s...

Scott Manufacturing Co.'s static budget at 10,000 units of production includes $40,000 for direct labor and $4,000 for electric power. Total fixed costs are $23,000. At 12,000 un

What is the marginal cost and average total cost, Below is a table with tot...

Below is a table with total data for a firm in a perfectly competitive industry. Quantity Total Cost 0 100 10

Describe the methods of recording, Q. Describe the methods of recording? ...

Q. Describe the methods of recording? Two general deductions from gross sales are (a) sales discounts and (b) sales returns and allowances. Sellers trace these deductions in co

Proprietorship , After adjustments and the closing of revenue and expense a...

After adjustments and the closing of revenue and expense accounts at February 28, 2015, the end of the first full year of operations, the income summary account has a credit balanc

Determine the income statement columns of worksheet, Determine the Income S...

Determine the Income Statement columns of Worksheet Income Statement columns of the worksheet would comprise the amounts from Adjusted Trial Balance columns which are expenses

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