What Are 12 Accounting Concepts? – A Summary
Accounting Concepts are the underlying assumptions used to produce a business’s financial statements. The term “concept” refers to an idea or thought. Concepts are the fundamental assumptions and conditions that underpin accounting principles. There are 12 accounting concepts. These are explained below: Money Measurement Concept The money measurement concept (alternatively referred to as monetary measurement) emphasises that […]
What is the Concept of Measurement in Accounting
Measurement in accounting process refers to determining the value of the transactions so that they are recorded and properly in books of accounts. Measurement is a very basic concept in accounting because it is the very basic foundation of the accounting system. Measurement in accounting describes and explains in what manner the financial transactions have […]
What is Dual Aspect Concept in Bookkeeping?
According to the dual aspect concept, there are two aspects of accounting, one represents the assets of the business, and the other is the claim against these assets (i.e. capital and liabilities). The concept states that these two aspects are ALWAYS equal to each other. Due to this reason, any accounting entry affects at least […]
What Are Accounting Principles, Concepts and Conventions?
Accounting is a fundamental aspect of running a business. It involves recording, analyzing, and interpreting financial transactions to provide an accurate picture of the company’s financial health. However, following certain principles, concepts, and conventions is essential to ensure that accounting information is consistent and reliable. This article will explore the basics of accounting principles, concepts, […]
What is the Accrual Concept in Financial Accounting?
The accrual concept is an accounting method used to record revenue and expenses when they occur rather than when they are paid. This means that revenues and expenses are recognised on the income statement in the period they are generated or incurred, regardless of when the cash is received or paid. This is the case […]