Accounting Postulates

Accounting postulate can be defined as a fundamental and basic assumption in the field of accounting. Accounting postulate can be described as underlying axioms that are the biases of all the further assumptions, calculations and decisions in the field of accounting. Accounting postulates can be tagged as the foundation stones of the discipline of accounting and they are well agreed upon by all the accounts and accounting authorities.

A number of agreed upon statements are contained in the accounting postulates that declare that the economic activity carried by certain economic and identifiable accounting entities will be continuous and the transactions among these identities will also be continuous and will occur at an identifiable time so that the entity will continue to act as a growing concern. As we have described earlier that all postulates are well agreed upon and none of them is controversial in terms of practicing however they may describe the difficulties that may arise in future while conducting advanced accounting practices.

For example there may be certain a transaction where there may be a disagreement exists upon recording the revenue and expense at different times and occurrences. Also in case of mergers and acquisitions there may arise a number of issues regarding the correct recording of the certain accounts of both the entities. In order to avoid confusions and contradictions guidelines must be maintained and implied so that the issues can fit within the general framework of accounting.

Other Related Accounting Articles:

• Foreign Exchange Accounting
• The Economic Entity Principle of Accounting
• Transaction Error Rate
• Absolute Performance Standard
• Accounting Theory
• Journal Accounting
• Basic Accounting Terminologies
• Economic Derivative
• Definition and Explanation of Accounting
• Forecasting