Accounting Concepts Definitions Part : 9 (completeness concept )

Accounting Concepts Definitions Part : 9

completeness concept in accounting

Completeness concept

As accounting is not only a process but also the responsible option to supply information, it is important for accounting to use its wing perfectly and for that completeness is the utmost necessity. It is not a common thing which the word may suggest. Rather this concept accompanies many other things like- financial statements, accounting records, invoices and finally audit. The gem is how all these are sewn together in one form. Take a look:

“A financial statement can be called complete if and only if the financial statement is prepared from accounting records kept by in house accountants, well documented with invoices, has full and true information about all the affairs the entity has had occurred during the period throughout the statement and the notes and is audited by professional accountants (Who may tag the statement as appropriate or, otherwise).”

So, the definition contains all the important points there is to cover. But, does that explain all the things?

If you have gone through the other articles who are before this in serial then many are supposed to be clear to you and so, taking you as a reader who has gone through all those before this one, I am just going for those things which need separate mentions to make this topic about completeness clear (Even if you have not read those you can always go for them so, the previous ones are left off).

Now, the points are:

Accounting records

The combination of journals, ledgers and finally financial statements is called accounting records. This combination puts all the information in one place (Journal) and then summarizes them (Ledger). Then the analysis on the summarized records is done (Financial statements). The complete combination puts the financial statements on a base.

Invoice

Whenever a transaction is made a receipt of some kind detailing about the transaction; with all about the price, quantity and the name & address of the supplier & receiver of that order, is provided- that document is called invoice.

Notes to financial statements

It is not always possible and is not even suggested to keep all the information within the financial statements, so, it is important to give an appendix. The appendix is called notes. Notes are an integral part in more than one way. Some are as follows:

  • To describe actions within the financial statements in detail with all the accounting policies’ reference
  • Some transactions which are not yet completed but, can have considerable impact in the future
  • Descriptions about the different decisions to come or, already been taken

Professional accountants

                                     To review the accounts if they are properly recorded and perfectly supported with documents, some person with knowledge of accounting is hired. Now what knowledge is required?

That person is needed to be a chartered accountant. Chartered accountants are the persons who are certified by an organization, governing body, completely designed to provide such certification and planned to dictate such professionals.

Now all the things being clear you may get hold of accounting concepts and the whole concept of “Completeness” better.

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