Question

Describe basic accounting principles​

Answer 1

Explanation:

Revenue Recognition Principle. When you are recording information about your business, you need to consider the revenue recognition principle. ...

Cost Principle. ...

Matching Principle. ...

Full Disclosure Principle. ...

Objectivity Principle.

Answer 2

Answer:

Check out below for the Answer!

Explanation:

• Accrual principle:- This is the concept that accounting transactions should be recorded in the accounting periods when they actually occur, rather than in the periods when there are cash flows associated with them. This is the foundation of the accrual basis of accounting. It is important for the construction of financial statements that show what actually happened in an accounting period, rather than being artificially delayed or accelerated by the associated cash flows.
• Conservatism principle:- This is the concept that you should record expenses and liabilities as soon as possible, but to record revenues and assets only when you are sure that they will occur. This introduces a conservative slant to the financial statements that may yield lower reported profits, since revenue and asset recognition may be delayed for some time. Conversely, this principle tends to encourage the recordation of losses earlier, rather than later.
• Consistency principle:- This is the concept that, once you adopt an accounting principle or method, you should continue to use it until a demonstrably better principle or method comes along.
• Cost principle:- This is the concept that a business should only record its assets, liabilities, and equity investments at their original purchase costs. This principle is becoming less valid, as a host of accounting standards are heading in the direction of adjusting assets and liabilities to their fair values.
• Economic entity principle:- This is the concept that the transactions of a business should be kept separate from those of its owners and other businesses. This prevents intermingling of assets and liabilities among multiple entities, which can cause considerable difficulties when the financial statements of a fledgling business are first audited.
• Full disclosure principle:- This is the concept that you should include in or alongside the financial statements of a business all of the information that may impact a reader's understanding of those statements.
• Going concern principle:- This is the concept that a business will remain in operation for the foreseeable future. This means that you would be justified in deferring the recognition of some expenses, such as depreciation, until later periods.
• Matching principle:- This is the concept that, when you record revenue, you should record all related expenses at the same time. Thus, you charge inventory to the cost of goods sold at the same time that you record revenue from the sale of those inventory items.
• Materiality principle:- This is the concept that you should record a transaction in the accounting records if not doing so might have altered the decision making process of someone reading the company's financial statements.
• Monetary unit principle:- This is the concept that a business should only record transactions that can be stated in terms of a unit of currency. Thus, it is easy enough to record the purchase of a fixed asset, since it was bought for a specific price, whereas the value of the quality control system of a business is not recorded. This concept keeps a business from engaging in an excessive level of estimation in deriving the value of its assets and liabilities.
• Reliability principle:- This is the concept that only those transactions that can be proven should be recorded. For example, a supplier invoice is solid evidence that an expense has been recorded.
• Revenue recognition principle:- This is the concept that you should only recognize revenue when the business has substantially completed the earnings process.
• Time period principle:- This is the concept that a business should report the results of its operations over a standard period of time. This may qualify as the most glaringly obvious of all accounting principles, but is intended to create a standard set of comparable periods, which is useful for trend analysis.

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