Need for Accounting Standards
Accounting Standards are required to ensure the compliance of the following information with the qualitative characteristics of accounting:
Accountancy
Meaning of Accounting Standards
In order to make these methods and principles uniform and consistent across organizations, the accounting standards have evolved. The meaning of Accounting Standards is discussed below
Accounting Standards
Accounting Standards are the statements of code of practice from the regulatory accounting bodies that are to be observed within the preparation and presentation of monetary statements.
11 Accounting Concepts with Examples
Accounting Concepts are the basic propositions and fundamental assumptions on which accounting operate. Financial statements are prepared and transactions are recorded on the basis of these generally accepted rules of accountancy.
What is Objectivity Principle?
According to the objectivity principle, the accounting should be free from personal bias. That is, the accounting transaction should be supported with written documents such as cash memo, invoices etc.
Materiality Concept in Accounting
Materiality Concept in Accounting – The main aim of the preparation of monetary statements is to enable the top users of the financial statements in making informed decisions.
Full Disclosure Principle in Accounting
According to the principle of full disclosure, the financial statements shall disclose all material facts either on the face of it or within the notes to accounts.
What is Accounting Period Concept?
As per the accounting period concept, the financial statements are prepared at regular intervals of time. We cannot wait for the liquidation of the company for the preparation of financial statements.
Historical Cost Concept in Accounting
Historical Cost Concept – The basic objective of the preparation of monetary statements is to enable comparability of monetary data and consistency in the adoption of financial policies.
Matching Principle Accounting
According to the matching principle, the expenses which are incurred to earn revenue shall be recorded within the same accounting period during which such revenue is recognized and not within the next or previous accounting period.