Question

what are the accounting concepts​

Answer 1

Answer:

Accounting Concepts

1.Business entity concept: A business and its owner should be treated separately as far as their financial transactions are concerned.

Money measurement concept: Only business transactions that can be expressed in terms of money are recorded in accounting, though records of other types of transactions may be kept separately.

2.Dual aspect concept: For every credit, a corresponding debit is made. The recording of a transaction is complete only with this dual aspect.

3.Going concern concept: In accounting, a business is expected to continue for a fairly long time and carry out its commitments and obligations. This assumes that the business will not be forced to stop functioning and liquidate its assets at “fire-sale” prices.

4.Cost concept: The fixed assets of a business are recorded on the basis of their original cost in the first year of accounting. Subsequently, these assets are recorded minus depreciation. No rise or fall in market price is taken into account. The concept applies only to fixed assets.

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Answer 2

(1) Accounting Concepts or Assumptions : –

In order to make the accounting language convey the same meaning to all people and to make it more meaningful, most of the accountants have agreed on a number of concepts which are usually followed forpreparing the financial statements. These concepts provide a foundation for accounting process. No enterprise can prepare its financial statements without considering these basic concepts or assumptions. These concepts guide how transactions should be recorded and reported. Following may be treated as basic concepts or assumptions :-

As per Accounting Standard (AS-1),

It is issued by the Institute of Chartered Accountants of India, there are three fundamental accounting concepts or assumptions:

(1) Going Concern Concept

(2) Consistency Concept

(3) Accrual Concept

Other Accounting Concepts :

(4) Business Entity Concept

(5) Money Measurement Concept

(6) Accounting Period Concept

(7) Cost Concept or Historical Cost Concept

(8) Matching Concept

(9) Dual Aspect Concept

(10) Matching Concept

(11)Objectivity Concept.