Some important feature of accounting 👇
1. Objectivity: It must be based on facts Imperial attitude ought to have been adopted for it. It is so, the principle is said to possess objectivity.
2. Application: If the application of the principle is possible it is regarded as a good principle. In case theoretically, the principle is sound, but its application is difficult, then the principle has no value.
3. Use: the principle should be such by whose are the utility of accounting record is increased. Suppose a principle has objectivity and it is applicable also but there is no use of this principle in accountancy record then also UK principle is careless.
4. The difference in the use of principles: This principle is used for only one work in the different way of principles.
5. Simplicity: This principle should have the simplicity of it is simple it With command popularity. Nature of accounting principle Generally accepted accounting principles incorporate the consensus at any time as to which economic resources and obligation should be recorded as assets and liabilities, which changes in they should be recorded how the recorded assets and liabilities and changes in them should be measured. What should be information should be disclosed and how it should be disclosed and which financial statement should be prepared.
Generally accepted accounting principles may be expressed as those rules, guidelines, and principles which are derived from experiences and practice and when they are used to accounting practice they, they become accepted as an accounting principle.
If any principle posses all the above characteristics, and they are accepted by all then they are know as accounting principles. Therefore, they are called G.AAP.
G.AAP.
Use of the word all in the above paragraph refers to the following.
1. Professional accountants.
2. Courts.
3. Government
4. Business executives.
5. Management accountants
6. Taxation experts etc.
Thus accounting principles have been developed by various agencies, out of which most important are various bodies related to accounting.
Institute of chartered accountancy of various countries of the world have done commendable work in this respect as Institute of Chartered Accountants of India.
American Institute of certified public accountants and Institute of chartered A/cs of England.
