The Money Measurement Concept is an accounting principle that states that only those transactions and events that can be expressed in monetary terms should be recorded and reported in the financial statements. This concept implies that accounting can only capture and measure transactions that have a quantifiable impact on the financial position of a business. … Read more
The Historical Cost Concept, also known as the historical cost principle, is an accounting principle that states that assets should be recorded and reported on the financial statements at their original acquisition cost. According to this concept, the value of an asset is based on the actual amount paid or the fair value of the … Read more
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 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
