What are the basic concepts of accounting ? What is their importance.
Answers
These basic accounting concepts are as follows: Accruals concept. Revenue is recognized when earned, and expenses are recognized when assets are consumed. ... Auditors will only certify the financial statements of a business that have been prepared under the accruals concept. Conservatism concept.
Why Is Accounting Important? Accounting plays a vital role in running a business because it helps you track income and expenditures, ensure statutory compliance, and provide investors, management, and government with quantitative financial information which can be used in making business decisions.
Answer:
• The accruals concept recognizes revenue when it is earned, and expenses when it is consumed.
• A conservative concept.
• The concept of consistency.
• An economic entity is a type of business entity.
• A going concern concept is a way to think about the future.
• A matching concept.
• A materiality concept is used to describe the quality of things.
Hope it helps you....