ACCOUNTING POLICY FOR REASONABLE PRICE
Importance of an Accounting Policy
An accounting policy is very important for the success of a company or business because many accounting standards allow alternative treatments for the same transaction in bookkeeping. Financial statements can be compared with other entities when all of the accounting policies are clearly outlined and shown.
An accounting policy disclosure helps to prevent loss. It also helps in preventing the misuse of assets.
Potential investors can study open accounting policies to decide if they will invest in the business or not. Net profits, assets, continuing operations, equities, and accounting statements are all influenced by the policies that a company adopts.
Internal control policy
In this policy, a separate person is required for another step of the bookkeeping. For instance, the one that handles the money is not responsible for bookkeeping them in an accounting system.
An accounting policy disclosure creates a system of check and balance in the business. These are essential for maintaining standardization across the board.