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Class XI - Chapter 3 - Theory Base of Accounting - Accounting Concepts Video Lecture - Commerce

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FAQs on Class XI - Chapter 3 - Theory Base of Accounting - Accounting Concepts Video Lecture - Commerce

1. What are the accounting concepts discussed in Chapter 3 of Class XI Commerce's Theory Base of Accounting?

Ans. The accounting concepts discussed in Chapter 3 of Class XI Commerce's Theory Base of Accounting include the concepts of business entity, money measurement, going concern, accounting period, cost, dual aspect, and realization.

2. Why is the concept of business entity important in accounting?

Ans. The concept of business entity is important in accounting because it helps in distinguishing the financial transactions of a specific business from the personal transactions of the owner or any other entity. It ensures that the financial records of a business are separate and distinct, providing a clear picture of the business's financial position.

3. What is the significance of the accounting concept of going concern?

Ans. The concept of going concern assumes that a business will continue to operate in the foreseeable future and will not be liquidated or cease its operations. This concept is significant because it allows accountants to prepare financial statements on the basis of this assumption, providing a more accurate representation of the business's financial position, performance, and cash flows.

4. How does the accounting concept of dual aspect affect the recording of financial transactions?

Ans. The accounting concept of dual aspect states that every financial transaction has two aspects - a debit and a credit. This concept ensures that for every debit entry, there is a corresponding credit entry, maintaining the balance between assets, liabilities, and owner's equity. It affects the recording of financial transactions by requiring accountants to make equal and opposite entries for each transaction, maintaining the accounting equation (Assets = Liabilities + Owner's Equity).

5. Explain the accounting concept of realization and its impact on recognizing revenue.

Ans. The accounting concept of realization states that revenue should be recognized when it is earned and not necessarily when cash is received. This means that revenue should be recorded in the accounting records when the goods or services are delivered, and the customer is legally obligated to pay, even if the payment is received at a later date. This concept ensures that revenue is recognized in the appropriate accounting period, matching it with the corresponding expenses and providing a more accurate representation of the business's financial performance.

Text Transcript from Video

accounting concepts accounting concepts
are the basic assumptions or the
fundamental proposition within which
accounting operates they are generally
accepted accounting rules based on which
accounting transactions are recorded and
financial statements are prepared it is
important to follow the accounting
concepts because it will enable the user
of financial statements to understand
them better and in the same manner

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About this Video

Nov 15, 2024 Last updated

Class XI - Chapter 3 - Theory Base of Accounting - Accounting Concepts for Commerce2024 is part of Commerce preparation. The notes and questions for Class XI - Chapter 3 - Theory Base of Accounting - Accounting Concepts have been prepared according to the Commerce exam syllabus. Information about Class XI - Chapter 3 - Theory Base of Accounting - Accounting Concepts covers all important topics for Commerce2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for Class XI - Chapter 3 - Theory Base of Accounting - Accounting Concepts.

Introduction of Class XI - Chapter 3 - Theory Base of Accounting - Accounting Concepts in English is available as part of our Commerce preparation & Class XI - Chapter 3 - Theory Base of Accounting - Accounting Concepts in Hindi for Commerce courses. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.

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