Accounting
conventions are the general norms and practices of the accounting profession
which are expected to be complied with by accountants. The common conventions
are:
conventions are the general norms and practices of the accounting profession
which are expected to be complied with by accountants. The common conventions
are:
1.
Prudence
Prudence
2.
Consistency
Consistency
3.
Objectivity
Objectivity
4.
Materiality
Materiality
Prudence: This convention demands exercising
great care in the recognition of profit while all losses are adequately
provided for.
great care in the recognition of profit while all losses are adequately
provided for.
Consistency: The same as consistency in
accounting principles.
accounting principles.
Objectivity: This convention connotes
independence of judgement on the part of the accountant preparing the financial
statement.
independence of judgement on the part of the accountant preparing the financial
statement.
Materiality: This holds that only items of
material value are accorded their strict accounting treatment.
material value are accorded their strict accounting treatment.