Definition: Accounting principles are the principle, concepts, basics, guidance, as well as rules that use by the accountant to prepare the financial statements of an entity. They are also used by the standard-setting body to develop accounting standards and frameworks. You may find out some of the accounting principles have been set out in the […]
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Definition: The matching principle is one of the accounting principles that require, as its name, the matching between revenues and their related expenses. The expenses correlated with revenues should be recognized in the same period in the financial statements. This concept tries to ensure that there are no over or under revenue or expenses records
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Accrual Basis: The Accrual basis is the accounting principle that use to recognize and record accounting transactions or events in the financial statements regardless of its cash flow. Under the accrual basis, expenses are recognized and recorded in the Financial Statements at the periods they are incurred rather than at the period they are paid.
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Definition: In accounting, going concerned is the concept that the entity’s Financial Statements are prepared based on the assumption that the entity operation is still operating normally in the next foreseeable period. This foreseeable period normally has twelve months from the ending period of Financial Statements. In order to assume that the entity has no
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Definition: Periodicity assumption is the accounting concept used to prepare and present Financial Statements into the artificial period of time required by internal management, shareholders, or investors. What does an artificial period mean? Well, most of the financial statements are prepared based on fiscal years. Sometimes, based on tax years for the tax purpose or
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Definition: The concept of the historical cost principle is that the assets are recorded based on the price at the time they are purchased, and the liabilities are recorded based on the values expected to pay at the original value rather than market value or inflation-adjusted value. The Historical cost accounting principles are used mainly
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