ACCOUNTING

CONCEPTS
ABINAYA. V
2nd BBA CA
 Accounting concepts are theoretical ideas,
components and terms that make up the
subjects accounting, finance and economics. 

What are These terms help individuals, businesses or

accounting organisation systematically record their
concepts? financial information and transactions. 

Accountants use these concepts as guidelines

to prepare financial reports and other
documents for individuals and businesses.
  Business entity concept
The business entity, economic entity or separate entity
concept assumes that a business is independent of its
owner.
11 IMPORTANT  Going concern concept
Going concern concept prescribes that accountants
CONCEPTS IN prepare financial statements on the assumption that a
ACCOUNTING business may continue its operations for the
foreseeable future.
 Accrual concept
Accrual is a fundamental concept that guides how a
business can record cash or credit transactions.
 Accounting period concept
The accounting period concept prescribes a timeframe
within which a business records and reports its
financial performance for the purview of internal and
11 external stakeholders.
IMPORTANT  Money measurement concept
CONCEPTS IN  This is an accounting concept based on assumption,
ACCOUNTING and it stipulates that companies record only those
transactions that they can quantify and measure in
terms of money.