The matching principle or expense recognition principle forms a necessary part of the accrual basis of accounting, and ensures that expenses are matched to revenues recognized in an accounting period.
Last modified September 29th, 2022
Accounting Principles
Monetary Unit Assumption
Economic Entity Assumption
The economic entity concept or business entity concept is one of the fundamental accounting principles, and states that a business is a separate entity from its owners. In practice this means that a business must keep separate financial records, which only include accounting transactions relating to the business.
Last modified January 7th, 2020
Qualitative Characteristics
Accounting Constraints
Accounting Assumptions
Financial statements are multipurpose documents used by many different parties for different reasons. For this reason financial statements need to be based on a generally agreed accounting framework or structure so that all parties understand how they are produced. Accounting assumptions can be considered to be the foundations on which the framework is based.
Last modified January 22nd, 2020
Accounting Principles
Double entry bookkeeping is the first stage in producing a set of financial statements for a business.
For the financial statements to be useful the users (the bank manger, tax authorities, owners, investors, etc) need to have agreed and understand how they were compiled from the underlying information, these understandings form the principles of accounts.
Last modified October 28th, 2022
Quiz 5: Basic Accounting Principles Quiz
Accounting Concepts
The accounting assumptions are supplemented by a number of accounting concepts, which act as guides on how particular business transactions should be reported in financial statements, and allow them to be objective (not subject to bias or influenced by personal feelings or opinions).
Last modified July 10th, 2020