Question

Difference between accounting principles and accounting policies

Answer 1

Policies are the norms, rules, directions, methods that a business decides for themselves. Policies are not universal, they can differ from one organisation to another. Accounting policy for an organisation basically defines “their” way of accounting for transactions.
But accounting policies cannot be arbitrary or random. For example, I cannot randomly say that I will charge depreciation based on the card that my parrot picks from the deck of cards! Even though accounting policies can differ from person to person, they still have to fall within an overall framework in order to be acceptable.

Answer 2

Explanation:

Accounting policies are procedures that a company uses to prepare financial statements. Unlike accounting principles, which are rules, accounting policies are the standards for following those rules. ... Accounting policies still need to adhere to generally accepted accounting principles (GAAP).

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