Accounting concepts principles homework help
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The language of business is accounting and the translators of this language into a simple and understandable context are accountants. To analyse, identify and measure various economic information and providing various postulations about it for the management of a company is also one term for accounting. The work of accounting is not only to analyse the financial transactions but also to determine the financial statements of an accounting period that defines the terminal position of a company in financial market. In our Accounting concepts principles homework help we take a look at the concepts and principles of accounting over which the various accounting methods are based.
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The basic assumptions over which the accounting system is based are called as accounting principles. The following points compiled by our Accounting concepts principles homework help team experts provide an insight about the basic principles.
1. Business entity concepts: This concepts separates business from businessmen and is treated as a segregated entity from its owner. A separate heading called capital account is used to define any transaction between the proprietor and the business.
2. Going concern concept: if any fixed asset is owned by the company, going concern concepts reveal that they should be completely used for their value till their usage span. The business should run long enough to charge the amount of fixed asset. The functioning of business should not stop and hence the liquidation of assets is avoided.
3. Dual aspect concept: every business transactions should maintain two aspects i:e; giving and receiving aspect or credit and debit aspect respectively. Every transaction record should be completed only after the dual aspect.
4. Cost concept aspect: basedon the going concern aspect, this aspect reveals the purchase information is assets. Any asset that has been purchased for a certain cost should be entered into the record book for that cost only. This is done so that the future accounting over that asset can be done clearly. These assets are recorded only after reducing the depreciation.
5. Money measurement concept: the business transactions that can be presented in monetary terms should only be represented in accounting. If there is any other method of transaction involved then it should be kept separate from the monetary record book.
As the companies have grown thousands of stakeholders, a uniform and standardized system of accounting is required to compare the companies on the basis of their financial position and performances. The principles are defined by GAAP or Generally Accepted Accounting Principles that is a protocol explained by accounting governing bodies. These principles ensure that the financial information produced is both reliable and brief. In our Accounting concepts principles homework help articles we follow the common practices and conventions of accounting. The accounting principles are important because
• They satisfy the objectives of the accounting methods
• Principles enable the accounting to be used in practical situations
• Reliability over the principles is high as far as correct mathematical calculation is concerned
• They are feasible in nature and can be applied without applying high costs.
• They are easily understood and applied by the people who have basic knowledge of finance.
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