Financial Accounting

Chapter 2

Nature of Financial Accounting Principles

LEARNING OBJECTIVES

At the end of the chapter, you will be able to understand

1. Need and Meaning of Accounting Principles

2. Meaning and Characteristic Features of Generally Accepted Accounting Principles (GAPP)

3. Basic Accounting Concepts – Entity Concept, Money Measurement Concept, Going Concern Concept – Accounting Standard (AS)–1, Periodicity Concept, Cost Concept – Special Features, Realisation Concept, Matching Concept.

4. Basic Accounting Conventions – Convention of Conservatism (Prudence), Convention of Consistency, Convention of Materiality and Convention of Disclosure

5. Distinction Between Concepts and Conventions

OBJECTIVE 1: NEED AND MEANING OF ACCOUNTING PRINCIPLES

A uniform set of rules ...