ACCOUNTING PRINCIPLES & CONCEPT

1. This concept assumes that, for accounting purposes, the business enterprise and its owners are two separate independent entities

• Money Measurement Concept

• Going Concern Concept

• Business Entity Concept

• Cost Concept

2. If all the business transactions are expressed in monetary terms, it will be easy to understand the accounts prepared by the business enterprise.

• Business Entity Concept

• Revenue Recognition Concept

• Money Measurement Concept

• Going Concern Concept

3. This concept states that a business firm will continue to carry on its activities for an indefinite period of time.

• Business Entity Concept

• Dual Aspect Concept

• Money Measurement Concept

• Going Concern Concept

4. It helps in calculating tax on business income calculated for a particular time period.

• Accounting Period Concept

• Dual Aspect Concept

• Money Measurement Concept

• Going Concern Concept

5. This concept requires asset to be shown at the price it has been acquired, which can be verified from the supporting documents.

• Matching Concept

• Historical Cost Concept

• Accounting Period Concept

• Going Concern Concept

6. It encourages the accountant to post each entry in opposite sides of two affected accounts

• Matching Concept

• Historical Cost Concept

• Accounting Period Concept

• Dual aspect Concept