Accounting Concepts [WIP]

Entity Concept

Money Measurement Concept

Going Concern Concept

Consistency Concept

Materiality Concept

Dual Aspect (Double Entry Bookkeeping)

Historical cost concept

Realization

[Income Statement] When to recognize revenue? Deals with converting assets into cash equivalents.
1. Revenue must be earned: Customer must receive goods/service
2. Revenue must be realizable: Customer paid / expected to pay

Revenue recognition principle


Matching Concept

[Income Statement]
1. Expenses are recognised when revenue is recognised
2. Expenses for goods delivered in future recognised in future
Matching concept

Conservatism Concept

[Income Statement] [Balance Sheet] Recognize revenues only when reasonably certain, but expenses should be recognized as soon as reasonably possible.

Last Updated: 9 June 2021