List of Basic Accounting Concepts

Here is the list of basic accounting concepts –

1. Dual Aspect concept – It states that every transaction should be recorded at two places.

2. Cost concept – All assets are recorded in the books of accounts at their purchase price and not at current market price.

3. Going Concern , It means that business will run for a long period of time and will not be liquidated in near future.

4. Accounting Period concept – It refers to the period for which financial statements are prepared for a company.

5. Money Measurement concept – Transactions which can be expressed in terms of money should be recorded in the books of accounts.

6. Business Entity concept – Implying separate entity of business from its owners.

7. Revenue Recognition concept – It states that revenue should be included in the books of accounts only when it is realized.

8. Matching concept, It implies that matching of expenses with that of revenue earned during accounting period.

9. Full Disclosure concept – It states that all material facts affecting the company should be disclosed in the financial statements of the company.

10. Consistency concept – Company should follow same accounting policies from year to year.

11. Conservatism concept – It states that all losses should be recorded before they happen but profits should only be recorded when it happens.

12. Materiality concept – This concept states that only material facts should be recorded.

13. Objectivity concept – It states that financial statements should be free from the bias of person recording the transactions.

2 comments… add one
  • Omoniyi bashir

    Thanks, this is very useful to me

    • aderonke akinade

      Thank u so much,its highly appreciated .

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