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Depreciation, Depletion and ITC Notes

Institution: Kenyatta University

Course: Bachelor of Commerce

Content Category: Lecture Notes

Posted By: Kipkiruikagawa

Document Type: PDF

Number of Pages: 11

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Summary

Brief Overview:
Depreciation, Depletion and ITC

1. Principles of Accounting

It involves the process providing quantitative information, primarily financial in nature, for use in the decision-making process - it the language of business.
The rules and conventions of accounting are commonly referred to as "principles," which means "a general law or rule adopted or professed as a guide to action; a settled ground or basis of conduct or practice."
Accounting principles do not prescribe exactly how each event occurring in an organization should be recorded. Consequently, there are many matters in accounting practice that differ from one organization to another because a single detailed set of rules could not conceivably apply to every organization. As a result, the accountants have considerable latitude within "generally accepted accounting principles" in which to express their own ideas as to the best way of recording and reporting a specific event.
The general acceptance of an accounting principle or practice usually depends on how well it meets three criteria:
Relevance: it should result in information that is meaningful and useful to those who need to know something about a certain organization.
Objectivity: the information is not influenced by the personal bias or judgment of those who furnish it. It connotes reliability, trustworthiness, and verifiability.
Feasibility: it can be implemented without undue complexity or cost.
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