7 Major Modifying Accounting Conventions

Modifying conventions are customs emerging from accounting practice that affects the result that would be obtained from a strict application of accounting principles. These modifying accounting conventions are:

Modifying accounting conventions

  1. Cost-benefit convention: According to this principle, a cost of applying an accounting principle should be less than benefits.
  2. Materiality principle: Non-relevant information is not to be shown in the financial statements.
  3. Articulation: According to this convention, articulate is fundamentally related to financial statements.
  4. Conservatism convention: Conservatism means being cautious and prudent and making sure that net assets and net income are not overstated.
  5. Timeliness: One of the efficient accounting conventions is timeliness. The general users of financial statements can expect that the respective company would publish their financial statements on time.
  6. Industry practice: There are some business organizations which are unique or peculiar by nature they need different types of accounting method for useful and realistic financial report.
  7. Consistency: Consentience generally requires that a company use the same accounting principles and reporting practice through time.
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Modifying accounting conventions

 

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1 comment for “7 Major Modifying Accounting Conventions

  1. Randi
    May 19, 2016 at 8:08 PM

    Well described, clear understanding. Can you please publish more article on accounting.

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