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.

Modifying accounting conventions

You May Like Also:

• Accounting as a career / profession
• The concepts / Assumptions / Principles of accounting
• Difference between bookkeeping and accounting
• Steps in the accounting process
• Difference between account and accounting
• Some Core Concepts of Accounting
• Functions of Accounting
• Basic principles of accounting information system
• What is the Definition of Accounting?