Financial Accounting

3 CHAPTER

Accounting Standards

INTRODUCTION

Accounting as a ‘language of business’ communicates the financial performance and position of an enterprise to various interested parties by means by financial statements which have to exhibit a ‘true and fair’ view of financial results and its state of affairs. Like any other language, accounting has its own complicated set of rules. The basic conventions or rules used in preparing financial statements had evolved over many years as a product of the collective experience of practicing accountants. As a result a wide variety of accounting methods were used by different companies. It was, then, felt that there should be some standardized set of rules and accounting principles to reduce or eliminate ...