—Kishore V, SME and ACW at Edumarz.
Principles, conceptions, conventions, postulates, assumptions, and modifying principles are some of the terms used to describe these regulations.
According to the AICPA, a principle is “a general law or norm chosen or avowed as a guide to behaviour, a settled ground or basis of conduct or practise.”
The word ‘usually‘ indicates ‘in a wide context,’ implying that it refers to a large number of people, cases, or events.
Generally Accepted Accounting Principles (GAAP) refers to the principles or guidelines used to record and report company activities in order to ensure consistency in financial statement production and presentation.
This increases accuracy in the recording process and makes accounting statements more acceptable to a wider range of users.
Most accounting professionals embrace the Generally Accepted Accounting Principles (GAAP), which have evolved through time-based on historical experiences, usages or practises individual and professional announcements, and government legislation.
Accounting ideas, on the other hand, do not remain constant over time.
These notions are also known as concepts and conventions.
Concept and convention refer to the necessary assumptions and ideas that are fundamental to financial accounting, whereas convention refers to the practices or traditions that serve as a guide to the preparation of financial statements.
Instead of going into the meaning of these terms, it is important to concentrate on the practicability of their usage. From a practical standpoint, it has been noticed that phrases like principles, postulates, conventions, modifying principles, assumptions, and so on have been used interchangeably and referred to as Basic Accounting Concepts.