Question

Custom and traditions which guide the accountant while preparing the accounting statements _______________.

• A. Accounting convention
• B. Accounting concepts
• C. Accounting principles
• D. None of these

Answer 1

Answer: (C)

Accounting principles

Accounting is based on certain concepts and conventions which are called as generally accepted accounting principles. On the basis of these principles, whole accounting function is performed. These can be classified as:

Concepts:

1) Separate Entity Concept

2) Money measurement Concept

3) Periodicity Concept

4) Dual Aspect Concept

5) Going Concern Concept

6) Cost Concept

7) Realization Concept

8) Matching Concept

Conventions:

1) Full Disclosure

2) Materiality

3) Consistency

4) Conservatism