Clan=XL

1 haptr 3 k CchEnto
ACCOunhng Concepk l a - XJ

goin
Tin Concern Assumption ACcording to his qSmhticn,
it is assumed that bunness wi
in1
keeh on geing in the future Qnd our inentian is not
to cloe
clos the
the burjness. Our intntton is also not 7o

Cale down 4 7 hK the eperatlos. It means we

amme hat bujiness will net be disso lvedr hkAi)
in near
future. Because t h i Camcept, expenditu e
a divided in h u Categories. e , Revtnue
Exhendihux qnd Capital Exhenditure
onsisten y Assump tHen According to this asumbin,

accounting me thods accounting polla'es, a Ccoun ting

ratces R 0nce sele ctd, and adopta muT
be athlied or usd yea7 afer yeqr. We shoald not
kee
keep om
Changi ng the mehods md bolieies. This aunptim
helfs o Combre The reJ ults ene yeqr wih anothe
year resulth. Jt meqns Combaisen Can be ane.

Far examrple : The qn tuo me thods for chargins daprtd fity

( Straight Line Me thod (2) hlridten Down Valut Metho
w e have plied Shraizht Lihe Me thod, it Ahould be
ued ear aft ar.
*alhen Method can be change d AKSHAY SIR&GAJJU SIR
KI, XII, B.Con: CLASSES
Acconts,
Tax, asing, F.M., ECO.,
1 Law Regul'res it C.A.-C.P.1.,
C.S.-Foundation,
bic, 981:311361, Eartive
S2i3149633
(2) 3f Accouning Standa rd Kegun .
(3 9P we w n t to make the qccoynts
more meqningful.
 I CA-3 Cncepss 4 Con nttoms

Accoual Assumbian: Accovding to his Comcept, a transa cthon

is recoxded in the 600ks of accoynth at the ime twhen
It take þlace. J4 me qns ransactien s recdrde d in
the books of a Cco un tp when sale Cemplee. I t is
immater/al whe the r Cah u received or not.
For example Rellanu Industies Limi ted RIL) sold go ods
ToSamSung Company fr F ISo oo m 27 Febru97y, 20/3
On Crtdit f wo months. So he RIL m ust
recrd sale 27
sale is
om
Rbruar ih acc ouns becau
Cemfle f on 27 februay, 94 me qht RIL ha
earned eve nue m 277Febru ry. But amount will
be recei ved on 27 Aril, 20/3.

Money Measure ment Pi nuble : According to this prineiple,

Only those ransa ctions and events aK re co vded in he acco unts
those Can be Con rtd (measud) in mmey ttrms. 9t means
a transa ch'en 0r n ertnt th at can not be conrtrkd into
Cah is nt recorded in he accounts.
Fa examhle: A qua7rel
between þrodu ion mqnaqer & Sales
managir Can not be
ecrded in the aceoun ts, Hmesty 4 Since rity workers,
t dedi'cat)n woke rs Can hot 6e re
Crde a in he hooks
of aceoun ts, hubli'e relatn'en f a busjnen a>x hot
recorded m the books of a ceounh ause
beca these ca ot
be measu red in momey trms. Jt meqns
heli'tetive
iems Can noT se shown 1n actoun AKSHAY
taAY SIR &
SIR &GAJI 1
XI, B.Com:GAJJU SIR
Tax, asting, Accounts,CLASSES
ECO.,
F.M.,
keb.C.981
S.-Foundation, Executive
C.A.-C.P.T.,
1311361,
9212149633
 Concepts & Comve n tHons K3
Countin1 Perioa Prinujle Accorai ng to this þrinible, the
Aife f he bujnes 6roken imts malle þe riods bo th
be known
the besrmane t h e 6unne may
Calculated at regula r intrvals,
at the Cnd of whied
CcOunti ng period the periodl
Tin 9nu'al st atemen s Prht & loss Account or Strilemert of rofit
Balane Shees epa reAY
M, XII, SIR&GAJJU
and at SIR CLASSEs
B.Com: Accounts, ECO0.,|
Gene rally
qene rall ACcounng Period of me
ya sting, F.M., C.A.-C.P.T.,
C.S.-Foundation, Executive
Mob. 9811311361, 9213149634
full s closue Prinuple: Accor ding to this
prineiple all
matt rial and Aignificant infrmatin must be disc/osed in
e 6o0R6. accounh apart
f 7rem eal reguirementp,
Whe the an
infermattn should be disclosed or hst, it aluays
lepends om he
matrialy the informatioy. For
Fa examble
the re atons
Flo rnoersales mut be
ooks f accoun7. Aisclose in

Mate riality Prinaple Ace ording t this priniple, nlyhore

ems should hown h the accouns those are mattrial
in natur, thoSe qe ignifi Cant to the uw p, An item
the know ledg fwlih can
changR te deisin ofq
bern A Called matt ri e , An item the know
ledge
d w hr Can hot influenee KTATT R7 he dedsion
a p e sn is Called immatt rial, Material n a t u
jtm must eshown & immatrial m s Can 6e izo ree
rom
7 rm 1the accounts, F example aalve rh'ement xbenses
5o0'o are mate ri'al h natu r bumnen who
a
Aale isT 500do. 8ut this erpense isimmatn'al for a
bujne whose ale 2 o Cuej .
 Ch-3 Concepts 4 Conen hes

rudence Cencept Comrenhon

r of Conse r vatsm
Accovding to this Con
cept 6 Do not antiühate aprrfit|
but ro vide for all bo rsi6le losses," Jt means we

hould ignor hossible futur rfih and IhCmnes.

le hould no t show fiutue brfis 4 in comes n the

aCcoun s.
But m the other hqnd, we8houla Bhow all

possible exhenses 4 o sies futue in he acco unth,

Became of tha Concept closin1tok is Ahown m the account
at Cost þrie o manket briee whicheveris Jes.
Becaure F
this Concept, we CHale þ r o s r foT Doubifk Debis
and
rov'sinm or dlis count m dbto vs,
Cost Com cept Hi'stovical Cost Priniple Accorang to thi
Concept we recovd an at Cost rice. Aset will be
recorded a t Cost prie at he tme burhos. But
he valus qn ae
sgre matilly by chauging
is reduced

Ke T alepreiat'n on o he anet, meant he mauket

Valus.
op an anet gnored, Fr example a bujne
urdanes meinery fur F So o o0. and if he mauket-
value h a mackine ry s 4oooU at Ke ime of
preparny t aceouns o7 7>oodo, Aset
cdled mly at noo00 . £
AKSHAY SIR& GAJJU
XI, XII, B.Com: SIR
CLASSES
Tax,sting, F.Miccounts,
., C.A.-C.ECO.,
P.T.,
C.S.-Foundaticn, Executive
Mob. 98l1311361, 9213149633
 Ch-3 Conceps & Cmenions 5
hi'ng Comceht: Accordi ng to his Comcept, the reve nu es
The accoynhng beriod a m atched w th the expenses
fhethe accouning be ríod to Calcula be the Comet
proft f accoun hng pe riod. /4 is not mper tant
Lwhen payment wa n ae or re c ved. 3/ eenues
a re moe than
exfenses, it means btuyness s earni
theproih. 3/ expenses aae moe 7h an 2eveuues, 1 meqns
bumhe s
Su/fermg /os.

Dual Aspet Cencept: Accordinj to This Concept, èvery

7ransactien h as tuo aipeck ne is
s debit and ano ther is
Credit Fmeans , or every debit, hee s Celt ef
Cjual mount. fo Cxqmble abbuyne took a bante

loqn .
So here, here are tuw apec/s
huy ansa ctin. On Cne hand, the buhnen has received
a
Ca oO000 . On te oh Riasilzy i.e, 6 mk loqn

hasbeen hCe ajed,

Becouje of This Concet Assets =
abitity + Cap/tal.
Revenu e Ketognitien Conceßf: Aceording /o h i s Cancept

rerenue srealise when hansa cin akes pla ce qnd

he ebliq at) on to 7euive the umou has beenestaslished.

mears Tevenut is AeparA and amount re cai ve ijs

separale. For a businen Aol4 gos c N éb.2o, 20/3,

So here enue s eCogpised Pe6,
on 2o, 20/3 tuhen
TOoas ae Aold. amount is Keteived on April 20, 20/ 3,
hat is 2 of imprtant, means
fes o, lo3:
 Chapkr-3 1.F.R.S.
e e n a betuveen 1.f. R.S and lndiqn G4: A dY
Ace Dun ting Standards
KInte mat'nel Finanuel
iniple based while .AReborhng Standa vds ae
A aax baKA.
rule bakd.
K 1F. K.
a S.
band en Fair Value
nuan G.A A Pa Cencebt while
based en
Histo
Hi'sto ricel
r/cel Cost
Cost
Con (ebt.

Vey m rfont Cen cebL

VeeLjable dkjective Concept os Cloective Eidehce Concet
AccRduq to thu cencebt, áectuuting sheuld e aee

em pesOnal &as. t mea all atcoLuling thansoucions

have
sheuld kave the eidence. Aans acti ons sheuld
These decumenis ase couk meme
wstttehbseel
wchale bill sales bill, oheque, Aeceupts, payun

Busi mess Entity Cotcept r

Separak eal Entily Concept:|
A ccording to this Cm
cept beisinerk is
4yea te d as
entity Jt
L separak frembunh ed man. 9t
m eans in he
eyes f law, ujnes
buy nesS man AYa rate
Aepa rat
a 7afe. The a Ccoun Ts
prepa td from 6ulyies
þoint of view Becaw
Beca use
this Cencejt
Capi tal s shown n liabily Aicle
ofBalar1 Co Shee t+.
AKSHAY SIR&GAJJU
KI, XII, B.Com: SIR CLASSES
Tax,isiing, F.M.,Accounts,
C.A.
ECO.,
Mob.C.98I13i136
S.-Foundation, Executive
-C.P.T.,
TS633