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Accounting Concept and Principles


Accounting Concepts and Principles are a set of broad conventions that have been devised to provide a basic framework for financial reporting. As financial reporting involves significant professional judgments by accountants, these concepts and principles ensure that the users of financial information are not mislead by the adoption of accounting policies and practices that go against the spirit of the accountancy profession. Accountants must therefore actively consider whether the accounting treatments adopted are consistent with the accounting concepts and principles.



Following is a list of the major accounting concepts and principles:-

Relevance

Reliability

Matching Concept

Timeliness

Neutrality

Faithful Representation

Prudence

Completeness

Single Economic Entity Concept

Money Measurement Concept

Comparability/Consistency

Understandability

Materiality

Going Concern

Accruals

Business Entity

Substance over Form

Realization Concept

Duality Concept

Historical Cost



Verifiability Concept


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