A business that buys and sell goods without changing their physical

form. Also known as "Trading Business"

A business that buys raw materials and process them into

final products.

This is viewed as a separate person.

For Business Transaction /

For Personal Transaction

This is where the assets are initially recorded at their

acquisition cost.

This concept assumes to continue to exist for an indefinite

period of time.

A concept of association of cause and effect - initially

recognized as assets: only when the related revenue is recognized.

A concept where it is recorded in the period in which they occur rather than at the point

in time when they affect cash.

It's where the accountant observes some degree of caution.

Potentially unfavorable outcome.

Divided into series of reporting periods.
"Periodicity / Accounting Period Concept"

Expenses are stated in terms of a common unit of measure.

Applying accounting principles. accounting principles are applicable

only to material items.

It is recognized as soon as goods have been sold or a service

has been rendered regardless of when money is actually needed.

Both the concepts of materiality and cost-benefit-users reflect a series of

judgemental trade-offs.

Business transactions to have some form of impartial supporting evidence

or documentations.