Principles of Accounting and Accounting Assumptions

In the world of the modem, no business can afford to remain secret as various parties such as creditors, employees, tax authorities, investors, the public and the government etc. They are interested in business matters. Business matters can be studied mainly on the basis of the final accounts and the balance sheet of the given enterprise. The final report and the balance are the end products of the bookkeeping. Due to the importance of these statements, it is necessary for the auditors to develop principles, concepts and conventions that can be considered as the basis for accounting. Such widely-accepted funds provide reliability and creditworthiness to the financial statements prepared by the accountants. The need for "generally accepted accounting principles" arises for two reasons: Firstly, logic and consistency must be in the record of transactions and, secondly, the established practices and procedures.

Accountants have no agreement on accounting concepts. The uniformity of generally accepted accounting principles (GAPP) is not uniform. Terms – axioms, assumptions, conventions, concepts, generalities, methods, rules, doctrines, techniques, postulates, standards, and canons are used freely and inconsistently in the same sense

A general law or rule, accepted or accepted on a permanent basis, based on conduct or conduct or practice. "The definition given by dictionaries is closest to describing what the majority of accountants mean by the word" principle. "It must be made clear that the principles applied in accounting practice, the world's principle, do not contain a rule that The accounting principle is not theoretical in the sense that it recognizes that they are not in conflict with other principles.

It is unmanageable to assume that it is self-evident or positive as it is self-evident. Postulates are assumptions but not arbitrary deliberate assumptions, but generally accepted assumptions that reflect the judgment of "facts", trends or events, assumptions that some facts considered in the past to be believed to be assumed by legal institutions can be implemented to a certain extent [19659002] The True Principles of Faith : What do the scriptures teach us anyway? yen. This refers to a principle that is promoted by a teacher trained by a strict faith. But in accounting practice, this doctrine does not have to be adhered to, but the word denotes the general principles or rules to be followed. Axiom

A statement of truth that no one can question.

Standards

See the basis for accounting practice under different circumstances. Indian Institute of Libraries (ICAI) was a committee of accounting standards on April 21, 1977. The main task of ASB is to establish accounting standards in the light of applicable laws, customs, customs and the business environment [19659002] Accounting assumptions

The International Accounting Standards Committee (LASC) and the Indipendent Authoritative Auditing Institute (ICAI) IAS-I and AS-I) Accounting assumptions:

In ordinary accounting, accounting assumes that the business will continue and continue its business for an indefinite period of time in the future. An entity assumes that it has been operating for a long time to carry out objects and plans. Based on the current value of assets-related values. The assumption is that the fixed assets are not intended for resale. It can therefore be argued that the balance sheet drawn up on the basis of the record of historical costs can not show at any given moment the actual or fair value of the concern. The principle is that in assessing continuous earnings, the power of income and not the costs constitute the basis. The business continues for an indefinite period and follows the financial and accounting policies to maintain the business continuity. [1] Consistency

It must be consistent with accounting processes and policies from time to time. Material changes, if any, should be disclosed, even if the technique improves. Changing the methods from one period to the next has a significant impact on trading results. Only when accounting procedures are consistently followed year by year the results published in the financial statements are consistent and comparable.

(3) Accrual

Accounting attempts for non-cash events and circumstances. Accrual accounting is about expected future cash receipts and payments: the accounting process for accounting for assets, liabilities or income in respect of amounts expected to be paid or paid in the future. Frequent examples of delimitations include loans, interest, rent (not yet paid), wages and salaries, taxes and purchases. Thus, we keep records of all the expense and income associated with the accounting period, whether or not we have paid or received actual cash. If you do not follow the basic accounting assumption (ie Going concern, consistency, and accrual) (when preparing the financial statements) then this fact should be disclosed. [AS-I para 27].

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