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PPT - Theory Base of Accounting
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Page 1 Theory Base of Accounting, AS and IFRS Chapter 3 Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards (IFRS) 1 Page 2 Theory Base of Accounting, AS and IFRS Chapter 3 Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards (IFRS) 1 Theory Base of Accounting, AS and IFRS Learning Objectives This chapter enables you to understand: 1. Meaning and Nature of Accounting Principles 2. Features of Accounting Principles 3. Necessity of Accounting Principles 4. Fundamental Accounting Assumptions a. Going Concern b. Consistency c. Accrual 2 Page 3 Theory Base of Accounting, AS and IFRS Chapter 3 Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards (IFRS) 1 Theory Base of Accounting, AS and IFRS Learning Objectives This chapter enables you to understand: 1. Meaning and Nature of Accounting Principles 2. Features of Accounting Principles 3. Necessity of Accounting Principles 4. Fundamental Accounting Assumptions a. Going Concern b. Consistency c. Accrual 2 Theory Base of Accounting, AS and IFRS Learning Objectives 5. Accounting Principles or Concepts a. Accounting Entity b. Money Measurement c. Accounting Period d. Full Disclosure e. Materiality f. Prudence or Conservatism g. Cost h. Matching i. Dual Aspect j. Revenue Recognition (Realisation) k. Verifiable Objective 3 Page 4 Theory Base of Accounting, AS and IFRS Chapter 3 Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards (IFRS) 1 Theory Base of Accounting, AS and IFRS Learning Objectives This chapter enables you to understand: 1. Meaning and Nature of Accounting Principles 2. Features of Accounting Principles 3. Necessity of Accounting Principles 4. Fundamental Accounting Assumptions a. Going Concern b. Consistency c. Accrual 2 Theory Base of Accounting, AS and IFRS Learning Objectives 5. Accounting Principles or Concepts a. Accounting Entity b. Money Measurement c. Accounting Period d. Full Disclosure e. Materiality f. Prudence or Conservatism g. Cost h. Matching i. Dual Aspect j. Revenue Recognition (Realisation) k. Verifiable Objective 3 Theory Base of Accounting, AS and IFRS Learning Objectives 6. Accounting Standards a. Meaning of Accounting Standards b. Nature of Accounting Standards c. Utility of Accounting Standards d. Accounting Standards issued by the Accounting Standards Board of the Institute of Chartered Accountants of India 7. IFRS (International Financial Reporting Standards) 4 Page 5 Theory Base of Accounting, AS and IFRS Chapter 3 Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards (IFRS) 1 Theory Base of Accounting, AS and IFRS Learning Objectives This chapter enables you to understand: 1. Meaning and Nature of Accounting Principles 2. Features of Accounting Principles 3. Necessity of Accounting Principles 4. Fundamental Accounting Assumptions a. Going Concern b. Consistency c. Accrual 2 Theory Base of Accounting, AS and IFRS Learning Objectives 5. Accounting Principles or Concepts a. Accounting Entity b. Money Measurement c. Accounting Period d. Full Disclosure e. Materiality f. Prudence or Conservatism g. Cost h. Matching i. Dual Aspect j. Revenue Recognition (Realisation) k. Verifiable Objective 3 Theory Base of Accounting, AS and IFRS Learning Objectives 6. Accounting Standards a. Meaning of Accounting Standards b. Nature of Accounting Standards c. Utility of Accounting Standards d. Accounting Standards issued by the Accounting Standards Board of the Institute of Chartered Accountants of India 7. IFRS (International Financial Reporting Standards) 4 Theory Base of Accounting, AS and IFRS MEANING AND NATURE OF ACCOUNTING PRINCIPLES "Principles of Accounting are the general law or rule adopted or proposed as a guide to action, a settled ground or basis of conduct or practice." -The American Institute of Certified Public Accountants Accounting Principles are the rules of action or conduct adopted by accountants universally while recording accounting transactions. They are the norms or rules which are followed in treating various items of assets, liabilities, expenses, incomes, etc. 5Read More
FAQs on PPT - Theory Base of Accounting
| 1. What are the fundamental principles of accounting theory that I need to know for SSC CGL? |  |
Ans. Accounting theory rests on core principles including the Entity Concept (business separate from owner), Going Concern (business continues indefinitely), Monetary Unit (transactions recorded in currency), Periodicity (financial records divided into periods), and Accruals Concept (revenues/expenses recorded when earned, not received). These foundational concepts govern how financial statements are prepared and interpreted. Understanding these principles helps students grasp why accounting entries follow specific rules and structures essential for the exam.
| 2. How do accounting concepts differ from accounting principles in practice? | |
Ans. Accounting concepts are assumptions underlying financial reporting-such as Entity, Going Concern, and Periodicity-providing the conceptual framework. Accounting principles are practical guidelines (like Accruals, Revenue Recognition, Matching) that govern transaction recording. Concepts establish *why* certain rules exist; principles dictate *how* to apply them. For SSC CGL candidates, distinguishing between these ensures accurate classification of accounting treatments and prevents confusion during problem-solving.
| 3. What's the difference between the cash basis and accrual basis of accounting for the exam? | |
Ans. Cash basis records transactions only when money changes hands, ignoring outstanding amounts. Accrual basis recognises revenue when earned and expenses when incurred, regardless of payment timing. Accrual accounting provides a truer financial position and is legally mandated in most accounting systems. The accrual concept is fundamental to theory-based accounting and frequently tested in SSC CGL; students must understand why businesses adopt it over simpler cash methods.
| 4. Why is the matching principle so important in accounting theory and exam questions? | |
Ans. The Matching Principle ensures expenses are recorded in the same period as the revenues they generate, providing an accurate profit picture. Rather than recording all cash outflows as expenses, only relevant costs matched to revenue are expensed. This principle prevents distorted financial results and is repeatedly tested in SSC CGL accounting theory. Mastering this concept helps students solve depreciation, provision, and expense recognition problems correctly.
| 5. What does the conservatism principle mean and when should I apply it in accounting problems? | |
Ans. Conservatism (or Prudence) dictates recognising all possible losses but only gains that are realised. When uncertain, accountants choose the treatment showing lower profit and assets. This prevents overstating financial position. In SSC CGL problems involving doubtful debts, stock valuation, or contingent liabilities, applying conservatism ensures prudent financial reporting. Students should refer to flashcards and mind maps to memorise when and how this principle applies across different scenarios.
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Document Description: PPT - Theory Base of Accounting for SSC CGL 2026 is part of SSC CGL Tier 2 - Study Material, Online Tests, Previous Year preparation. The notes and questions for PPT - Theory Base of Accounting have been prepared according to the SSC CGL exam syllabus. Information about PPT - Theory Base of Accounting covers topics like and PPT - Theory Base of Accounting Example, for SSC CGL 2026 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for PPT - Theory Base of Accounting.
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