The consistency concept is an accounting principle that states that once a company chooses an accounting method or policy, it should consistently apply that method or policy in all subsequent financial periods. It ensures that financial statements are comparable over time, enabling users to make meaningful analyses and evaluations. Here are some key points regarding … Read more
The going concern concept is an accounting principle that assumes a business will continue its operations in the foreseeable future. It implies that a company has no intention or necessity to liquidate or cease its operations, but rather intends to operate indefinitely. Key aspects of the going concern concept include: 1. Financial Statement Preparation: Under … Read more
The entity concept, also known as the entity assumption or business entity concept, is a fundamental accounting concept that treats a business as a separate and distinct entity from its owners or shareholders. It is based on the principle that the financial affairs of the business are separate and should be accounted for independently of … Read more
Accounting concepts, also known as accounting principles or fundamental accounting concepts, are the basic principles and guidelines that provide a framework for the preparation and presentation of financial statements. These concepts ensure consistency, reliability, and comparability in financial reporting across different businesses and industries. 1. Entity Concept: The entity concept states that a business is … Read more
These golden rules serve as the foundation for recording transactions accurately and maintaining the integrity of financial statements. By following these rules, accountants ensure that the accounts reflect the financial reality of a business and facilitate accurate financial reporting and analysis. 1. Personal Accounts Rule Personal accounts refer to accounts that represent individuals, such as … Read more
