Accounting Concepts

Accounting Period innovation Also known as Time Period where business operation can be divided into specific intent of time such as a month, a quarter or a yr(accounting fulfilment). accomplishment accounts be lively at the end of the accounting period ie one year. Internal accounts can be prep ared monthly, quarterly or half yearly. Accrual idea Requires only revenues and expenses to be taken into account for the period in which they are earned and incurred when determining the profit/(loss) of the business. The net profit/(loss) is the electric outlet among the revenue EARNED and the expenses INCURRED and not the difference between the revenue RECEIVED and expenses PAID. Business Entity Concept Also known as Accounting Entity convention which states that the business is an entity or body first-class honours degree from its owner. Therefore business records should be separated and distinct from in person records of business owner. Consistency Concept According to this convention, accounting practices should reside unvaried from one period to another. For example, if depreciation is charged on inflexible assets according to a particular method, it should be through year after year. This is necessary for purpose of comparison. Dual scenery Concept take over admission system. For every debit, there is a credit entry of an equal amount. Full divine revelation Concept Financial statements should provide comfortable or pertinent information to influence users decision making. issue Concern Concept The business will follow accounting concepts and methods on the self-reliance that business will continue its operation to the foreseeable future(a) or for an indefinite period of time. Historical represent Concept Business should report its activities or economic events at their genuine cost. For example, fixed assets are recorded at their cost in accounts except for land which can be revalued due to applic ation. materiality Concept The account! ant should attach importance to material lucubrate and...If you deficiency to get a full essay, order it on our website: OrderEssay.net

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