Accounting Concepts and conventions

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

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

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

• Money Measurement Concept

• Historical Cost Concept

• Going Concern Concept

• Dual Aspect Concept

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

• Historical Cost Concept

• Accounting Period Concept

• Revenue Recognition Concept

• Matching Concept

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

• Money Measurement Concept

• Full disclosure convention

• Dual aspect Concept

• Realisation concept

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

• Matching Concept

• Accrual Concept

• Revenue Recognition Concept

• Cost Concept

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

• Accrual Concept

• Matching Concept

• Revenue Recognition Concept

• Going Concern Concept

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

• Accounting Period Cycle

• Source Document

• Fiscal Year

• None of the Above

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

• adequate disclosure

• business entity

• objective evidence

• going concern

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?

• The month the goods were sold.
• The month the goods were produced.
• The month the cash is creceived from the customer.
• None of the above.