Accounting Concepts and Principles are a set of broad conventions that have been devised to provide a basic framework for financial reporting. Accounting concepts are postulates, assumptions or conditions upon which accounting records and statement are based.

The purpose of accounting is to provide the information that is needed for sound economic decision making. The main purpose of financial accounting is to prepare financial reports that provide information about a firm’s performance to external parties such as investors, creditors, and tax authorities.

Management accounting combines accounting, finance and management with the leading edge techniques needed to drive successful businesses. The process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short-term decisions