Imperatives of Accounting Principles, Concepts and Conventions in the Preparation of Financial Statement

Abstract

takes an exploratory approach in an attempt to examine the Imperatives of Accounting Principles, Concepts and Conventions in the Preparation of Financial Statement. These analysis are focused on an examination of how accounting concepts and convention help in the preparation of financial statement which are used in decision making and for evaluation of financial strength, profitability, and future protection of the organization. It can therefore be concluded that accountancy plays a vital role in the stewardship of an organization. Accounting has been defined as the process of recording, classifying, reporting and interpreting the financial data of an organization. While it is important for the accountant to have a sound knowledge of this phase of accounting process, it is often a relatively minor part of their total attention to the management reporting and interpretation of the meaningful implication of the data, thereby punctuating the importance of being fully abreast and utilizing to the fullest, all relevant accounting concepts and conventions. The study therefore recommended that since Accounting is therefore basically regarded as a language of communication in an organization like every system of communication; its main purpose must constantly be streamlined to give different types of information to interested persons. Because of this main purpose, accounting must continue to forms a major part of the total information system in any entity, be it business or non-business.