Applicability of Accounting Concepts and Conventions in Recording of Business Transactions (A Conceptual Overview)

Ahakiri, Francis Idiege
Department Of Accounting
University Of Calabar

The study presents a conceptual overview of the application of accounting concepts and conventions
in recording of business transactions and the treatment of accounting bases. Literature in the field of
accounting concept and conventions were sourced and reviewed accordingly. This enabled the
researcher gathered information about the concepts under review. Each of the accounting concepts
and conventions was discussed alongside it applicability as it relates to generally Accepted
Accounting Practice. (GAAP). The study further made an attempt to define some key concepts in
accounting especially as it relates to transaction recording to keep academics abreast with accounting
terminologies and trend. The study found that accounting concepts and conventions when adhered to
in recording of business transactions would aid the preparation of financial statements that are clear,
concise and easily understood thereby assisting users of accounting information to better understand
and appreciate financial statement. This assists users of financial information to form, confirm, and
review financial reports to ensure that accounts do indeed portray accurately the business operations
and performance. The study therefore recommended that businesses should maintain a particular way
which it chooses to treat items or transactions year by year and when it is necessary for change, and
explanations be given and it effect shown in the note to the account, all cash transactions should be
recorded in the cash book regardless of the amount involved, and finally prevent inadvertent omission
of some adjustments.

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