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प्रश्न
Why are Generally Accepted Accounting Principles (GAAP) needed?
Why accounting principles are necessary.
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उत्तर
Accounting principles are necessary due to the following reasons:
- Accounting principles facilitate uniformity in accounting practices. The information become comparable, leading to better analysis and comparison of performances.
- Accounting principles facilitate meaningful presentation.
- They ensure consistency in the accounting statements of a business enterprise from year to year.
- They may be regarded as a means to establish that the collective wisdom and experience, rather than the viewpoint of individual accountant, may prevail in the matter.
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संबंधित प्रश्न
What does GAAP stand for in Accounting?
Explain the need for GAAP for accounting.
It is due to this concept that financial statements are prepared at regular intervals, generally one year.
According to this principle, accounts should be prepared in such a way that all the material information required by users of financial statements is clearly disclosed.
According to this principle, cost of a particular period should be charged from the revenue of same period only.
What is business entity concept of accounting?
"Accounting records serve as a source of information to the creditors of an organisation". Comment.
Explain any two basic concepts of accounting.
Explain the revenue principle.
Explain the principle of consistency.
