What are accounting Principles?
Answer Posted / mandar
Accounting Principles are classified into two categories
A) Accounting concepts
B) Accounting Conventions
A) Accounting concepts
1)Business entity concept - business is separet entity from
owner
2)Dual Aspect concept - Liabilities = Assets (dr = cr)
3)Going concern concept - business is going to be in
existence for an indefinitely long time.
4)Accounting period concept - Indefinite long period is
divided into short span for accounting purpose.
5)Cost concept - cost of aquisition of assets is considered
for accounting (considering depriciation) and not current
price of assets.
6)Money measurement concept - only facts which can be
measured in money find place in accounting.
7)Matching concept - expences and costs incurred during
period whether paid or not must match the revenue for that
particular period.
B)Accounting Conventions
1) Convention of conservation
2)Convention of Materiality
3)Convention of Consistency
Is This Answer Correct ? | 293 Yes | 39 No |
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