Difference between Accounting Concepts and conventions

Before understanding the Difference between Accounting Concepts and Conventions, the both concepts should be known.

ACCOUNTING CONCEPTS

The Accounting Concepts are the foundation of the accounting. These concepts are the assumptions which are generally accepted and followed while performing the recording of transactions and preparation of final accounts. The accounting concepts help in conveying the financial information in a same meaning to the various users of the accounting. By following the concepts, one can select the appropriate methods to be used in particular situation.

ACCOUNTING CONVENTIONS

The Accounting conventions are the guidelines based upon custom or usage or general agreement. The accounting conventions are used while maintaining the financial statements by the common consent of the accountants. In the adoption of accounting conventions, the personal judgment plays an important role. There is some kind of logic behind the usage of the conventions. Also there is no uniformity in the adoption of accounting conventions in various business enterprises.

EXAMPLE: The use of ‘TO’ on Debit side with expenses and the use of ‘BY’ on the credit side with incomes is a convention followed in India, UK and other countries but not in the USA.

DIFFERENCE BETWEEN ACCOUNTING CONCEPTS AND CONVENTIONS

BASIS OF DIFFERENCE	ACCOUNTING CONCEPTS	ACCOUNTING CONVENTIONS
MEANING	Accounting concepts are the assumptions that guide how the transactions should be recorded and reported.	Accounting convention may be defined as a custom or generally accepted practice which is adopted either by general agreement or common consent among accountants.
LEGAL POSITION	Accounting concepts have legal acceptance.	Accounting conventions are guidelines based upon custom or usage or general agreement.
RECORDING VS. FINANCIAL STATEMENTS	Accounting concepts are the basic assumptions on the basis of which transactions are recorded and accounts are maintained.	Accounting conventions are followed in preparing the Profit and loss account or Income Statement and Balance sheet or Position Statement.
SIGNIFICANCE	Accounting concepts are uniform set of rules followed in the recording of transactions.	Accounting conventions are not so important as accounting concepts.
ROLE OF PERSONAL JUDGMENT	There is no role of personal judgment or individual bias in the following of accounting concepts.	Personal judgments play an important role in the adoption of accounting conventions.
UNIFORM ADOPTION	There is uniform adoption of accounting concepts in different business enterprises.	There is no adoption of accounting conventions in various business enterprises.

Also Study	Also Study	Also Study	Also Study
Accounting	Non profit organisation	Depreciation	Liquidity ratios
Nature of Accounting	Receipts and Payments Account	Depreciation Accounting	Acid Test Ratio
Benefits of Accounting	Scope of accounting	Hire Purchase Accounting	Cash Ratio
Difference between cost accounting and financial accounting	Financial accounting, cost accounting and management accounting	Difference between hire purchase and instalment system	Financial ratio analysis
Difference between transaction and event	Transactions	Users of Accounting	Ratio analysis
Limitation of Accounting	Capital Expenditure	Instalment System	Difference between consignment and sale
Book Keeping	Revenue Expenditure	Reserves Accounting	Abnormal loss vs normal loss in consignment
Accountancy	Difference between capital and revenue expenditure	Provisions	Treatment of loss on consignment
Accounting as science or an art	Accounting Equation	Single entry system	Accounting treatment of consignment
Book Keeping vs accounting	Deferred Revenue Expenditure	Difference between statement of affairs and balance sheet	Joint venture vs consignment
Book keeping vs accountancy	Capital receipt	IFRS	Departmental Accounting
Accounting vs accountancy	Revenue receipt	Balance Sheet	Methods of departmental accounting
Basis of Accounting	Difference between capital and revenue receipt	Profit and loss Account	Allocation of expenses in departmental accounting
Branches of accounting	Difference between accounting concepts and conventions	Trading Account	Inter-departmental transfers
Cash and mercantile system of accounting	Accounting Standards	Voyage Account	Different types of branches
Accounting Principles	Objectives of Accounting	Accounting for Incomplete Voyage	Departmental vs Branch accounting
Golden ru les of accounting	Process of Accounting	Joint venture	Methods of branch accounting
Double entry system of book keeping	Scope of Accounting	Joint Venture Vs Partnership	Incorporation of branch trial balance
Double entry vs Single entry system	Accounting Concepts vs Accounting conventions	Methods of recording transactions in Joint Venture	Garner VS Murray Rule
History of Accounting	Difference between provisions and reserves	Consignment