What are accounting Principles?
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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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