InterviewSolution
Saved Bookmarks
InterviewSolution
| 1. |
accounting conventions |
| Answer» <p>There are four main conventions in practice in accounting: conservatism; consistency; full disclosure; and materiality.</p><p>Conservatismis the convention by which, when two values of a transaction are available, the lower-value transaction is recorded. By this convention, profit should never be overestimated, and there should always be a provision for losses.</p><p>Consistencyprescribes the use of the same accounting principles from one period of an accounting cycle to the next, so that the same standards are applied to calculate profit and loss.</p><p>Materialitymeans that all material facts should be recorded in accounting. Accountants should record important data and leave out insignificant information.</p><p>Full disclosureentails the revelation of all information, both favourable and detrimental to a business enterprise, and which are of material value to creditors and debtors</p> <p>tqqqqqq☺️</p> | |