Scribd
Upload
8 views2 pages

Mba 809 Ii

Writeup on Accounting

Uploaded by

asuquogideon92
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
8 views2 pages

Mba 809 Ii

Writeup on Accounting

Uploaded by

asuquogideon92
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

ASUQUO GIDEON

MBA 809 FINANCIAL ACCOUNTING ASSIGNMENT TWO

Explanation of Accounting conventions and the its common types:

Accounting conventions are general guidelines or principles that are widely accepted by accountants and the

auditors in the absence of specific standards. They help to ensure consistency, objectivity, and fairness in financial

reporting. Here are some of the most common accounting conventions:

1. Conservatism: This convention emphasizes caution and prudence when recording financial information. When

faced with uncertainty, accountants should choose the option that minimizes profit or maximizes loss. This helps

to ensure that financial statements are not overly optimistic and protects stakeholders from being misled.

2. Consistency: This convention requires a company to use the same accounting principles from one period to the

next. This ensures that financial statements are comparable over time and allows users to track the company's

performance accurately.

3. Full Disclosure: This convention requires companies to disclose all relevant financial information in their

financial statements, even if it is unfavorable.

4. Materiality: This convention focuses on the importance of information to users of financial statements. Only

information that is likely to influence the decisions of users’ needs to be disclosed.

5. Cost-Benefit: This convention suggests that the cost of preparing and disclosing information should be

balanced against the benefits to users.

Reference:

1. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 830

2. International Accounting Standards Board (IASB) International Financial Reporting Standard (IFRS) 1

3. Securities and Exchange Commission (SEC) Regulation S-X

You might also like