Application Of Accounting Principles And Standard In Modern Accounting Practice

Accounting Principles as a term is said to be a set of rules that govern accounting practices. They are rules that companies must follow when preparing and reporting financial statements. These principles are meant to be followed and adhered to in the determination and measurement of assets, liabilities, income and expenses for financial reporting.

Accounting standards on its own are pronouncements or statement issued by accounting regulatory bodies such as Financial Accounting Standard Board (FASB) equivalent to Nigeria Accounting Standard Board (NSB) which serve as a guideline to the preparation of financial statement showing the level of what is expected from firms and companies in their financial statement production and presentation.

Both Accounting Principles and Standard are rules and guidelines that are necessary for a meaningful financial statement of different companies because they help in the uniformity of different company’s preparation of financial statement. For instance, by using consistent principles, all companies reporting under Generally Accepted Accounting Principles report and prepare their financial statements in a consistent manner. The Application of Accounting Principles and Standards mean the practical use of these rules and guidelines by companies. 

The Generally Accepted Accounting Principles and Standard (GAAP) cannot be left out the mentioning of accounting principles and standards because it is the codification/arrangement of how firms and corporations prepare and present their business income and expenditure, assets and liabilities on their financial statements. It is not a single account rule but the aggregate of many rules and standards on how to account for various transactions.

This chapter deals with the review of related works in the area of the study which is the Application of Accounting Principles and Standards in Modern Accounting Practice.

 

At the sub – headings level, we looked at the overview of accounting principles, fundamentals of accounting principles, historical costs of principles, harmonization of accounting principles, nature of accounting standards, overview of statements of accounting standards, statement of accounting standard and the relationship between accounting standard and principles.

This chapter deals with discussion, conclusion and recommendations of the research work. According to Baridam (2004) the essence of every research study is that at the end of the study, the conclusion is drawn and the necessary recommendation given. Therefore, in this chapter being the concluding chapter of the study, the researcher would discuss the results of the analysis carried out mostly as it concerns the research question and the hypothesis, the conclusion would then be drawn based on the results of the analysis carried out and the necessary recommendation would be given based on the findings.