Accounting concepts are general rules and assumptions that are complied with by accountant from posting to the ledgers to the preparation of financial statements. Accountants all over the world applied the seven accounting concepts which are Going concern, dual aspect concept, realisation concept, accrual concepts, business entity concept, matching concept, money measurement concept and historical cost concept.
Accounting conventions are the general ways and customs followed by all accountant in the preparation of financial statement. Infact, it can be said that in the accounting community, conventions are like norms and customs followed by all accountant. There are three accounting convention: Materiality, Prudency and Consistency convention.
Accounting principles are rules, guidelines, assumptions, ways and customs used in the posting all accounting transactions and in the preparation of financial statements. Accounting concepts and conventions are accounting principles. There is also Generally Acceptable Accounting Principles (GAAP) and accounting standards.
In summary, we can differentiate between accounting concepts from accounting convention and principles by:
1. Definition and