1. 
 www.steria.co.uk
© Steria
Accounting Concepts
Collated by
S Saravanan
D Ravichandran

2.  www.steria.co.uk
 Some Facts … Good to Know
 Luca Pacioli (1446–1517), is widely regarded to be the “Father of Accounting” because he
was the first to codify and publish this accounting system in his book titled , “The Collected
Knowledge of Arithmetic, Geometry, Proportion and Proportionality” (translated). The book
was published in 1494 (about the time that Columbus discovered America) and it was one of
the earliest books published on the Gutenberg press.
Commercial in Confidence2
 Debit and Credit. Using his native Latin, Luca named the act of entrusting - „Credre‟ (which
means „to entrust‟) and the corresponding obligation on the firm - „Debere‟ (which means „to
owe‟). That‟s why we say DR and CR and not DB CD
 Double entry system. He was so convinced of this concept of duality, that he is said to
declare that no one should go to sleep at night without ensuring that the „credre‟ equalled the
„debere‟. (credits = debits)

3.  www.steria.co.uk
 Accounting Conventions
Commercial in Confidence3
• All significant / material informations passed to the reader
• It can be in foot notes, body of financial statements, in the
minutes of meetings of directors etc.,
Disclosuer
• Insignificant things can be ignored
• Judemental stand what is immaterial for one concern may be
significant for other
Materiality
• Accounting practices should remain unchanged from one period
to other
• If change is necessary it should be disclosed
Consistency
• Project the possible loss and not the expected gain
Conservatism
Theterm"conventions"includesthosecustomsortraditionswhich
guidetheaccountantswhilepreparingtheaccountingstatements.
Thefollowingaretheimportantaccountingconventions.

4.  www.steria.co.uk
 Accounting Concepts
Going
concern
Business
Entity
A/cing
Period
Realisatio
n
Money
Measure
Cost
Concept
Matching
Dual
Aspect
Commercial in Confidence4
http://www.accounting4management.com/accounting_concepts.htm#Cost%20Concept
AccountingConceptsandPrinciplesareasetofbroadconventionsthathavebeen
devisedtoprovideabasicframeworkforfinancialreporting.Asfinancialreportinginvolves
significantprofessionaljudgmentsbyaccountants,theseconceptsandprinciplesensure
thattheusersoffinancialinformationarenotmisleadbytheadoptionofaccounting
policiesandpracticesthatgoagainstthespiritoftheaccountancyprofession.Accountants
mustthereforeactivelyconsiderwhethertheaccountingtreatmentsadoptedareconsistent
withtheaccountingconceptsandprinciples.

5.  www.steria.co.uk
 What we do here?
 Accounts Payable
 Accounts Receivable
 Cash management
▬ Payments
▬ Bank Reconciliation
 Payroll
 General Ledger
 Fixed asset
 Controls and Reporting
Commercial in Confidence5

6.  www.steria.co.uk
 Thank you
Commercial in Confidence6
Let me hear … Lets
find an answer
Let your manager / senior
know.. .. We will find an
answer