Accounting policies

Accounting policies are the specific accounting bases selected and consistently followed by a business. Accounting policies need to be appropriate to the circumstances of a business so that, when applied to accounting transactions, the resulting accounting information presents fairly its results and financial position. Accounting policies are largely governed by the application of accounting standards. However, there remains a large amount of subjectivity that needs to be applied when determining how to apply accounting policies.

 

reference: Business Studies / Accounting. Accounts & Finance Glossary. Jim Riley BA(Hons) MBA FCA // tutor2u

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