POA - Accounting Concepts & Conventions

There's no difference between Accounting Concepts and Accounting Conventions.

It is important to be guided by these concepts and conventions because of the many persons who work for varying organizations.

Accounting Concepts and Conventions are not the same as Accounting Principles.

The Accrual/Matching Concept states that expenses incurred for the business can be recorded in any period that the accountant chooses.

The Prudence Concept is the same as the Conservatism Concept.

The Prudence Concept states that profits are to be understated and losses are to be overstated.

The Consistency Concept states that accounting treatment of items can be changed year by year.

"What belongs to the owner belongs to the owner and what belongs to the business belongs to the business". This is the Separate Entity Concept.

The Dual Aspect/Double Entry principle concept states that a transaction must be recorded at least twice.

The Money Management Concept states that all information must be recorded in the books of accounts, including the skills of the workers.

The Historical Cost Convention is of the view that the assets of a business must be recorded at their true value, which is the current market price, in the balance sheet.