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Convention of consistency. In accounting, the convention in consistency is a principle that the same accounting principles should be used for preparing financial statements over a number of time periods. [1][2] This enables the management to draw important conclusions regarding the working of the concern over a longer period. [3]
In the field of accounting, when reporting the financial statements of a company, accounting constraints (also known as the constraints of accounting) are boundaries, limitations, or guidelines. These constraints may allow for variations to the accounting standards an accountant is trying to follow. Types of constraints include objectivity ...
Generally Accepted Accounting Principles (GAAP or U.S. GAAP or GAAP (USA), pronounced like "gap") is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC) [1] and is the default accounting standard used by companies based in the United States. The Financial Accounting Standards Board (FASB) publishes and maintains ...
Accounting. In accounting, the convention of conservatism, also known as the doctrine of prudence, is a policy of anticipating possible future losses but not future gains. It states that when choosing between two solutions, the one that will be least likely to overstate assets and income should be selected. This policy tends to understate net ...
t. e. A going concern is an accounting term for a business that is assumed will meet its financial obligations when they become due. It functions without the threat of liquidation for the foreseeable future, which is usually regarded as at least the next 12 months or the specified accounting period (the longer of the two).
Substance over form is an accounting principle used "to ensure that financial statements give a complete, relevant, and accurate picture of transactions and events". If an entity practices the 'substance over form' concept, then the financial statements will convey the overall financial reality of the entity (economic substance), rather than simply reporting the legal record of transactions ...
In accrual accounting, the matching principle dictates that an expense should be reported in the same period as the corresponding revenue is earned. The revenue recognition principle states that revenues should be recorded in the period in which they are earned, regardless of when the cash is transferred. By recognising costs in the period they ...
For example, information on fossil fuel inputs to each sector can be used to investigate flows of embodied carbon within and between different economies. The structure of the input–output model has been incorporated into national accounting in many developed countries, and as such can be used to calculate important measures such as national GDP.