The general acceptance of an accounting principle or practice depends on its capacity to meet
the criteria of relevance, objectivity and feasibility.
An accounting principle should be relevant, i.e. the use of it should result in information that is meaningful and useful to the financial statement users. In other words only those accounting rules which increase the utility of the business records to its readers will be accepted as an accounting principle by them.
It should be objective. The accounting information obtained should not be influenced by the personal bias or judgement of the statement makers. Objectivity can notes reliability or trustworthiness. It means that there must be means of ascertaining the correctness of the information reported in a financial statement.
A principle is feasible to the extent that it can be implemented without undue cost or complexity. The accounting principles may be adopted to the needs of business quickly and easily. It means the accounting principles should be flexible, i,e. they should not be static. They should be capable of being changed with the changes in business methods and procedures.
