Accounting principles
Accounting principles
Accounting principles are of two types:
1. Accounting concepts : Which includes
Entity concept
Dual aspect concept
Going concern concept
Accounting period concept
Money measurement concept
Cost concept
Revenue recognition concept
The matching concept
Accrual concept
Objectivity concept
2. Accounting conventions
Convention of disclosure.
Convention of materiality
Convention of consistency
Convention of conservatism.
Accounting concepts
Entity concept
It is an artificial account.
Dual aspect concept
It is based on double entry book system. Every transaction has credit and debit.
Going concern concept
It is concept which says that all the business will be continued year after year.
Accounting period concept
It is period of one year normally financial year is from first April to 31st March of next year.
Money measurement concept
It will be maintained in terms of monetary only.
Cost concept
It is the actual cost that is incurred.
Revenue recognition concept
It is the money that you invest and you pay the salary for your employees and the revenue which you get back.
The matching concept
It is the comparison or matching of the all expenditures and income.
Accrual concept
Something occurred and you recorded that actual rate incurred which you will record it.
This is same with sales also.
Objectivity concept
Accounts prepared and maintained.
Accounting conventions
Convention of disclosure.
Everything should be disclosed
Convention of materiality
Material should be disclosed that is genuine transactions.
Convention of consistency.
It has to be consistent that is should occur regularly.
Convention of conservatism.
Should be careful.
Thank you
Deepti
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