Accounting Concepts

Accounting Concepts

1. Going Concern: -

   • The assumption that the Business is going to continue in the foreseeable future.

2. Accruals (Matching): -

   • The matching of costs and revenues to the final accounts in which goods and services were used.

3. Consistency: -

   • The continued adoption of policies for dealing with financial records.

4. Prudence: -

   • Where losses are provided for immediately in the financial records but profits are not recognised until they have been realised.

5. Materiality: -

   • Where items with a low monetary are not recorded individually.

6. Duality: -

   • The principle that every business transaction has two aspects and is recorded as a DEBIT and a CREDIT.

7. Business Entity: -

   • The assets and liabilities of the owner are kept separate from the assets and liabilities of the Business.

8. Realisation: -

   • Where revenue is regarded as having been received only when the ownership of goods are exchanged and where a sale is recorded when it is either a cash or credit purchase.

9. Money Measurement: -

   • Where only items with a monetary value are recorded in the financial records of a business.