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Describe any two accounting concepts which guides the accountant at the recording stage.?
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Describe any two accounting concepts which guides the accountant at th...
Accounting is defined by the American
Accounting Association as “The process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information.”
Accounting concepts:
Business
Entity concept: Financial transactions of a business and its owner are treated separately.
Money
measurement concept: In accounting, the recorded transactions are the business transactions that are expressed in terms of money.
Dual aspect
concept: For every credit,a corresponding debit is made. The recording of a transaction is complete only
with this dual aspect.
Going concern
concept: In accounting, a business is anticipated to exist for a long time while fulfilling its commitments and obligations. This means that the business will liquidate its assets at “fire-sale” prices
Cost concept: In the first year of accounting, based on the original cost, the fixed assets of a business are recorded. Subsequently,depreciation is excluded while recording. On fixed assets, the rise or fall of
market price is excluded.
Accounting
year concept: Each business chooses a specific time period to complete a cycle of the accounting process—for example, monthly, quarterly, or annually—as per a fiscal or a calendar year.
Matching
concept: In a given accounting period, it is expected that for every entry of revenue recorded there should be an equal expense entry for calculating profit or loss.
Realization
concept: Profit is recognized only when it is earned. For example: Any advance is not considered unless the product is delivered to the customer.
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Describe any two accounting concepts which guides the accountant at the recording stage.?
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Describe any two accounting concepts which guides the accountant at the recording stage.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Describe any two accounting concepts which guides the accountant at the recording stage.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Describe any two accounting concepts which guides the accountant at the recording stage.?.
Describe any two accounting concepts which guides the accountant at the recording stage.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Describe any two accounting concepts which guides the accountant at the recording stage.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Describe any two accounting concepts which guides the accountant at the recording stage.?.
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