Accounting conventions can be classified into 4 major types that are, • Full Disclosure The convention of full disclosure relates to the concept that a business entity should submit true and complete accounting statements and should not withhold any facts that can affect the investors and creditors. • Materiality As per this convention, all the facts that are material to the company, investors, clients, and customers should be disclosed in the prescribed manner. • Consistency This is an important convention that requires consistent application of accounting rules and procedures for all the accounting periods. This helps in proper statistical comparison of accounting reports. • Conservatism Conservatism is an important approach in accounting that seeks the business entities to stick with conventional accounting and financial practices with a view to avoiding unwarranted financial risks.