What are Accounting Concepts, Principles & Conventions?
Options
A
B
C
D
For any discrepancies in this question, email contact@cadada.in
Theoretical FrameworkQuestion 4944 of 110
All Questions Correct Answer
✅ Option — Correct Option
All Options:
- A
- B
- C
- D
Detailed Solution & Explanation
# Accounting Concepts:
## Meaning:
* Accounting Concepts is generally used to mean a 'Notion' only or mental idea about something.
* It is a principle which is taken to be self-evident or axiomatic (i.e., something which does not require to be proved) which has already been proved to be true.
* In other words, it may be an assumption or axiom constituting the supposed basis of a system.
* It is considered to be of a more fundamental character and universally acceptable which may be applied in all possible cases. It will have greater general applicability.
* These postulates are either descriptive (explanatory) or suggestive (normative).
* There is no authoritative list of these concepts.
# Accounting Principles: ## Meaning: * Accounting principles are the norm or rules which are to be followed in treating various items of Assets, Liabilities, Expenses, Incomes etc. * Ex. (i) Inventory should be valued at lower of cost & net reliable value. (ii) Fixed Assets should be depreciated over its useful life, (iii) Valuation norms for current & permanent investments etc. * An accounting principle can have alternative methods to apply it. Like in case of inventory we have methods of cost measurement by FIFO or weighted average.
# Accounting Conventions: ## Meaning: * It refers.to the general agreement on the usage and practices in social or economic life, i.e., it is a customary practice, rule, method or usage. * In other words, it is an accounting procedure followed by the accounting community on the basis of long-standing customs.
# Accounting Principles: ## Meaning: * Accounting principles are the norm or rules which are to be followed in treating various items of Assets, Liabilities, Expenses, Incomes etc. * Ex. (i) Inventory should be valued at lower of cost & net reliable value. (ii) Fixed Assets should be depreciated over its useful life, (iii) Valuation norms for current & permanent investments etc. * An accounting principle can have alternative methods to apply it. Like in case of inventory we have methods of cost measurement by FIFO or weighted average.
# Accounting Conventions: ## Meaning: * It refers.to the general agreement on the usage and practices in social or economic life, i.e., it is a customary practice, rule, method or usage. * In other words, it is an accounting procedure followed by the accounting community on the basis of long-standing customs.
More Questions from Theoretical Framework
What do you mean by accounting? Give its definition.
What are the branches of Accounting? Explain. OR What are the sub-fields of Accounting? [Dec 2023]
Limitations of accounting
Functions of accounting data. [Jan. 2025, 4 Marks]
Differentiate between Book keeping and Accounting. [Sept. 2024, 4 Marks]
Capital is all assets less fictitious assets.
Ready to Master Theoretical Framework?
Practice all 110 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.
Start Practicing — It's Free