Division of Accounting principles

Division of Accounting Principles :

Accounting principles can be divided into :
(1) Accounting Concepts.
(2) Accounting Conventions.

1.Accounting Concepts : Accounting Concepts, generally, means the assumptions upon which accounting is based. They have been developed by accountants to make accounting convey the same meaning to all people as well as practicable.
There are number of accounting concepts agreed upon and adopted by accountants. Some of the important accounting concepts are :
(a). Money Measurement Concept or Common              Denominator Concept.
(b). Business Entity Concept or Separate Entity            Concept.
(c).  Going Concern Concept or Concept of                      Continuity.
(d). Cost Concept.
(e). Dual-aspect Concept, Equation Concept or             Accounting Equation Concept.
(f). Accounting Period Concept.
(g). Objective Evidence Concept.
(h). Matching Concept or Periodical Matching              Concept.
(i). Realisation Concept Revenue Recognition              Concept.
(j). Accrual Concept.
(k). Legal Aspect Concept.

2. Accounting Conventions: Accounting conventions refer to customs, traditions, usages or practices followed by accountants as a guide in the preparation of financial statements. They are adopted to make the financial statements clear and meaningful.
There are number of accounting conventions adopted by accountants. Some of the important accounting conventions are:
(a). Convention of Materiality.
(b). Convention of Conservatism.
(c). Convention of Consistency.
(d). Convention of Full Disclosure.