Accounting Concepts and conventions

Front

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

Back

Business Entity Concept

Front

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

Back

Money Measurement Concept

Front

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

Back

Going Concern Concept

Front

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

Back

Historical Cost Concept

Front

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

Back

Dual aspect Concept

Front

It helps in knowing actual expenses and actual income during a particular time period.

Back

Accrual Concept

Front

It guides how the expenses should be matched with revenue for determining exact profit or loss for a particular period.

Back

Matching Concept

Front

The accounting period of a business is separated into activities that help the business keep its accounting records in an orderly fashion.

Back

Accounting Period Cycle

Front

Concept: a business's records should never be mixed with an owner's personal records and reports

Back

business entity

Front

The Matching Concept states that revenue should only be recognised when it is earned and not received. If a company sells goods on credit in March and receives payment in May, this would be shown in the sales figure for?

Back

The month the goods were sold.