Accounting principles are divided into two types. These are A. Accounting concepts B. Accounting conventions C. Accounting standard D. Both A and B

The correct answer is: Both A and B.

Accounting principles are divided into two types: accounting concepts and accounting conventions.

• Accounting concepts are the fundamental assumptions that underlie the preparation and presentation of financial statements. They are the foundation on which accounting standards are based.
• Accounting conventions are the practical rules that have evolved over time to ensure that financial statements are prepared in a consistent and understandable manner.

Some examples of accounting concepts include:

• The going concern concept: This concept assumes that the business will continue to operate for the foreseeable future.
• The accrual basis of accounting: This concept requires that revenues and expenses be recognized in the period in which they are earned or incurred, regardless of when cash is received or paid.
• The historical cost principle: This principle requires that assets be recorded at their original cost, less any accumulated depreciation.

Some examples of accounting conventions include:

• The materiality concept: This concept states that only information that is significant to the users of financial statements should be disclosed.
• The conservatism concept: This concept states that accountants should err on the side of caution when making estimates.
• The consistency concept: This concept requires that companies use the same accounting methods from period to period.

Accounting concepts and conventions are important because they provide a framework for the preparation and presentation of financial statements. They help to ensure that financial statements are accurate, reliable, and comparable.