a. Entity Concept: Every economic unit, regardless of its legal form of existence, is treated as a separate entity from parties having proprietary or economic interest in it.
b. Going Concern Concept: The assumption is that the business unit will operate in perpetuity that is the business is not expected to be liquidated in the foreseeable future.
c. Periodicity: Although, the results of a business unit cannot be determined with precision until its final liquidation, the business community and users of financial statements require that the business be divided into accounting periods usually one year and that changes in position be measured over these periods.
d. Realisation: The concept establishes the rule for the periodic recognition of revenue as soon as it is capable of objective measurement, and the value of asset received or receivable is reasonably certain.
e. Matching Concept: The concept hold that for any accounting period, the earned revenue and all the incurred cost that generated that revenue must be matched and reported for the period.
f. Consistency: The concept of consistency holds that when a company selects a method it should continue to use that method in subsequent periods so that comparison of accounting figures overtime is meaningful.
g. Historical Cost Concept: The historical cost concept holds that cost is the appropriate basis for initial accounting recognition of all asset acquisition, services rendered or received, expenses incurred, creditors and owners interest. It also holds that subsequent to acquisition, cost value are retained through out the accounting process.
h. Money Measurement Concept: The concept that financial accounting information relates only to those activities which can be expressed in monetary terms.
i. Materiality: The principle that financial statement should separately disclose items which are significant enough to affect evaluation or decisions.
j. Consistency: Consistency is the practice of using the same accounting ,methods and procedures overtimes. It means that once a company selects a specific accounting method or policy, it should use the same method or policy in all future accounting periods. It helps to maintain comparability and uniformity in financial statement, allowing stakeholders to accurately analyze a company`s financial performance over time.
Click on the links below:THE MAN OF CONFIDENCE:
https://objunityonlineclasses.blogspot.com/2022/10/the-man-of-confidence.html
DEPRECIATION:
https://objunityonlineclasses.blogspot.com/2022/10/solution-to-test-question-on.html
TRIAL BALANCE:
https://objunityonlineclasses.blogspot.com/2022/10/tutorial-questions-on-trial-balance.html
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