This document discusses key accounting concepts and conventions that should be followed when preparing financial statements. It outlines concepts like the business entity, money measurement, going concern, accounting period, matching, and dual aspect concepts. It also discusses conventions such as consistency, conservatism, materiality, and full disclosure principles. Accounting concepts and conventions provide fundamental ground rules that ensure uniformity and comparability in financial reporting.

1. Accounting Concepts And
Conventions
PRESENTATION BY-
Priya Bharati 05 Pravesh
Jaiswal 17 Sneha
Rajani 34 Sourabh Shingare
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2. WHAT IS CONCEPTS AND CONVENTIONS.
Accounting concepts and conventions
could be defined as ground or laid
down rules of accounting that should
be followed in preparation of all
accounts and financial statements.

3. TYPES OF ACCOUNTING CONCEPTS
Business Entity concept
Money Measurement concept
Going Concern concept
Accounting Period concepts
Matching concepts
Dual Aspect concepts

4. BUSINESS ENTITY CONCEPT
A business entity means a unit of
organised business activity
This concept distinguishes the affair of
the business from the personal affairs
of the business
Business organisation is considered to
be separate and distinct entity from
owners

5. MONEY MEASUREMENT CONCEPT
The basic concept in accounting is
money.
Accounting deals with the monetary
expression of economic events.
Only those transactions and events
are to be recorded in the books which
can be expressed in terms of money.

6. GOING CONCERN CONCEPT
Accounting assumes that an entity is a
“going concern”.
Business will continue to operate for
indefinitely long period in the future
and will not dissolved in the immediate
future.
The valuation of assets of a business
entity depends on this assumption.

7. ACCOUNTING PERIOD CONCEPTS
Accounting measures activities for a
specified period of time called
„accounting period‟.
One year period is taken for
measuring the performance of a
business.
Accounting year may be financial year,
calendar year or natural year.

8. MATCHING PERIOD CONCEPT
This concept provides the guidelines
as to how the expenses be matched
with revenues to find out profit or
losses.
To determine the results of business
operations during a particular
accounting period.

9. DUAL ASPECT CONCEPT
Every transaction or event has two
aspects i.e
1.receiving aspects
2.giving aspects.
Therefore two accounts are to be
opened in the books of the accounts.
There will be double entry for every
transactions.

10. TYPES OF ACCOUNTING
CONVENTIONS
Consistency principle
Conservatism principle
Materiality principle
Full Disclosure principle

11. CONSISTENCY PRINCIPLE
The consistency concept requires that
once the enterprise has decide on one
method, it will treat all subsequent
events of the same character in the
same manner.
They cannot change unless it has
sound reason of treatment.

12. CONSERVATISM PRINCIPLES
It states that, anticipate no profits, and
provide for all possible losses.
It takes into consideration all probable
losses but ignores all expected profits.

13. MATERIALITY PRINCIPLE
Materiality principle implies that the
transaction and events that have
immaterial or insignificant effects
should not be recorded.

14. FULL-DISCLOSURE PRINCIPLE
It states that business should disclose
all relevant information to external
users for the purpose of sound
economic decisions.