Accounting standards

Hi kiddo! Do you know what accounting is? It's like organizing and keeping track of money that a company or a person has. But when we talk about accounting standards it means a set of rules that help make sure everyone does their accounting the same way.

Just like how we all follow different rules when we play games, accountants also follow different rules when they are organizing and keeping track of money. These rules are called accounting standards.

So why do we need accounting standards, you might ask? Well, it's because when companies or people keep track of their money in different ways, it can be confusing for others to understand. For example, imagine if everyone played the tag game with different rules - one person could say you have to touch someone's head to tag them, but another person might say you have to touch their shoulder. That would be confusing, right? So accounting standards make sure everyone is playing the same game in the same way when it comes to money.

There are different accounting standards used around the world, but they all have the same purpose - to make sure everyone is doing their accounting the same way. This makes it easier for things like audits (when someone checks if the accounting is accurate) and for people to compare financial information between different companies.

So, just like how following rules helps us play games and have fun, accounting standards help companies and people organize and keep track of their money in a fair and accurate way!