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There are many types of accounting policies being used by businesses. These policies help the business owners as well as the clients. Releasing financial statements in accordance with certain accounting policies is highly recommended, important, and very useful because these policies are the framework of accounting – they reflect the major accounting principles. Here, we tell you about accounting policies and their importance. But before we head over to that, let’s talk about what accounting policies actually are. A brief description Accounting policies are the principles used by a company to release its financial statements, especially the more detailed or complicated ones. Needless to say, different companies might have different accounting policies (but they all adhere to the Accounting Standards ). According to the International Accounting Standards 8 (IAS 8), the accounting principles of a company are: “The specific principles, bases, conventions, rules and

There are a lot of common practices and procedures in accounting, but some are absolutely necessary to understand for anyone stepping into the accounting area. Here we give you the common accounting practices and procedures. 1. Maintaining a general ledger Maintaining a general ledger is the prime duty of a company. It’s one of the building blocks of accounting . A general ledger is a place where a business stores all its accounts: expense, revenue, liabilities, equity, and assets. All transactions are recorded in the general ledger. It can be physical or electronic as well. It serves as the prime reference for finding transaction details and financial reporting . What’s equally important as having a general ledger is maintaining it. That’s to say, keeping it current and updated with all happenings. Each outflow and inflow marked, each withdrawal and account closing properly obvious – a general ledger is good only as long as you’re keeping it updated. Chartered

The basic accounting principles are a must-know. In some cases, if you don’t know and follow the principles, you might not be able to run a very successful business or get listed in the stock exchange. The accounting standards are important to know and these standards enforce the basic accounting principles themselves to ease the use of accounting for business owners and the readers of their economic reporting. There are a total of 13 basic accounting principles and we’ll give you a brief summary of each. Remember, this article is just for getting started. It’s not your full guide to accounting principles. ·         Consistency: Your method of financial reporting and the accounting shall be consistent unless you discover a better method and make it known that you’re changing. It’s really hard to trust companies without consistent accounting because it’ll be taking a risk to invest in them if their results and estimates can be easily manipulated by using different meth