Accounting Norms and Principles

This brief paper describes the purpose of an accounting system as a tool to provide credit union management with complete and accurate financial information that can be used to operate the credit union safely and effectively. It notes that accounting effectiveness can be enhanced with the use of accepted accounting principles that address day-to-day credit union operations including:

  • proper methods for handling member’s transactions;
  • accurate recording or transactions in the books and records;
  • proper receipt and disbursement of funds; and
  • preparation of financial statements in a manner that reflects the current financial position.

It is also stated that accounting records also serve as a basis for reports t the members and interested third parties. Therefore, it is essential that the records be accurate, current, and reveal the true financial condition of the credit union.

This paper sets out key terms, norms and principles used in accounting, and provides definitions and explanations of each point with respect to credit union management.

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