Understanding the 4 Conventions in Accounting
Introduction: The 4 Conventions in Accounting
What are Conventions?
Within the broad principles of accounting, conventions provide specific guidelines and limitations. They help clarify the application of these principles in recording and reporting financial transactions. In modern accounting, we adhere to four key conventions:
- The Convention of Consistency
- The Convention of Conservatism
- The Convention of Materiality
- The Convention of Objectivity
1. The Convention of Consistency
This convention emphasizes
Read MoreUnderstanding Financial Statements: Key Concepts and Disclosures
Financial Statement Disclosures: Inventory
NIC 2 – Information to be Disclosed in Financial Statements
The following information regarding inventory should be disclosed in the financial statements:
- (a) Accounting Policies: The accounting policies adopted for the valuation of inventories, including the cost formula used.
- (b) Total Carrying Amount: The total carrying amount of inventories and partial sums according to classifications appropriate to the entity.
- (c) Fair Value Less Costs to Sell: The carrying
Understanding Bank Accounts: A Comprehensive Guide
Liability Operations of Banks
Banking operations are classified into three main groups:
Passive Operations
These operations provide funds to banks, typically held in checking and savings accounts, time deposits, and certificates of deposit. They are included in the liabilities of the bank’s balance sheet.
- Current Accounts (Checking Accounts)
- Savings Accounts
- Time Deposits
- Certificates of Deposit
Credit Operations (Concessions)
These are credit transactions of money or availability provided by banks to their
Read MoreAggregate Demand & Open Economy Macroeconomics: A Comprehensive Analysis
Distribution of Aggregate Demand in a Closed Economy (Long Term)
Exercise 1
Consider a closed economy operating at full employment characterized by the following system of equations:
Based on this information:
- Find the total saving function of the economy. Calculate the partial derivative of this function relative to the interest rate and provide an intuition for the results.
- Find the effect on the interest rate of increases in public spending. Express your result in terms of model parameters.
- Explain
Fiscal Federalism and International Public Finance: A Comprehensive Overview
1. Fiscal Federalism
a) Overview of Fiscal Federalism
Justification: Since prosecution necessarily falls within the limits of a territory, each function (allocation, distribution, stability, and development) must be analyzed in its specific spatial context. Therefore, it is necessary to study and adjust the economic and financial relations of the different levels of government that exist in the states. This aims to achieve equity and/or efficiency in the allocation of resources with spatial reference
Read MoreMastering Negotiation: 5 Keys to Success
Control of the Negotiation Process: Avoiding Common Pitfalls
A common error in negotiation is the lack of a clear definition of success. This can lead to manipulation and an ineffective negotiation strategy. A well-defined goal is crucial for a win-win outcome. A good result in a negotiation typically exhibits the following characteristics:
1. Best Alternative to a Negotiated Agreement (BATNA)
In a successful negotiation, the agreed-upon outcome should be superior to each party’s best alternative
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