Accounting Principles

Cost should be matched with the revenue generated.

All relevant and material information should be reported.

This is also known as prudence. In this principle, assets and income should not be overstated while liabilities and expenses should not be understated in case of doubt.

In this principle, assets that are immaterial to make a difference in the financial statements should be recorded as an expense.

This principle states that revenue should be recognized when earned regardless of collection and expenses and should also be recognized when incurred regardless of payment.

Accounts should be recorded initially at cost.

Financial statements must be presented with supporting evidences.

Amounts are stated into a single monetary unit.

financial statements are to be divided into specific time intervals.

Business is expected to continue indefinitely.