Question

Explain the following accounting principles?


 Matching Principle


 Dual Aspect Principle


 Prudence Principle


 Money Measurement Principle​

Answer 1

Explanation:

Matching principle is the accounting principle that requires that the expenses incurred during a period be recorded in the same period in which the related revenues are earned. This principle recognizes that businesses must incur expenses to earn revenues.

Every transaction of a firm is recorded in two different accounts. This relates to double entry bookkeeping. That means dual aspects concept tells every transaction affects the business in at least two aspects which are equal and opposite in nature. ... Auditors will accept dual aspect concept.

In accounting, the convention of conservatism, also known as the doctrine of prudence, is a policy of anticipating possible future losses but not future gains. ... In accounting, it states that when choosing between two solutions, the one that will be least likely to overstate assets and income should be selected.

The money measurement concept (also called monetary measurement concept) underlines the fact that in accounting and economics generally, every recorded event or transaction is measured in terms of money, the local currency monetary unit of measure.