Accounting Concepts & Conventions

• Business Entity Concept


  The transactions recorded in the books are only those that affect the business or firm, not the person who owns or manages it
• Money Measurement Concept


  Accounting is concerned only with facts that can be measured in terms of money
• Cost Concept


  Assets are shown at cost price and this forms the basis for assessing their future usage
• Going Concern Concept


  The business will continue to operate for an indefinitely long time
• Dual Aspect Concept


  Each transaction affects a minimum of 2 accounts resulting in both the giving and receiving of some value
• Accrual Concept


  Revenue and expenses are brought into account in the period to which they relate rather than the period of payment
• Realisation Concept


  The date on which goods or services are transferred to a customer is the date revenue is considered to be earned and profit is made