CONVENTION USED IN MODERN SYSTEMS OF ACCOUNTING

BALANCE SHEET, INTERNATIONAL FINANCIAL REPORTING STANDARDS, BOOKKEEPING

Principle means a general law or rule adopted or professed as a guide to action ‘a settled ground or a basis of conduct or practice’. The word ‘Principle’ when applied in accounting may have different meanings in different contexts. It is not used in the sense of a fundamental accounting truth – it connotes a guiding influence or an accepted rule of action or conduct.

Accounting principles have been defined as the body of doctrine, commonly associated with the theory and procedure of accounting, serving as an explanation of current practices and as a guide for the selection of conventions or procedures where alternative exist.

In simple words, ‘Accounting Principles’ may be defined as those rules of conduct or procedure which are adopted by the accountants universally for recording and reporting of financial data. These