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Saturday, March 21, 2009

Accounting Concept:

Accounting concepts:
Accounting concepts are basic assumption of accounting. It is like foundation on which the structure of accounting is built. Some popular accounting concepts are as follows:
  1. Business Entity Concept
  2. Going Concern Concept
  3. Money Measurement Concept
  4. Accounting Period Concept
Accounting Principles:
Accounting principles are broad rules, law adopted by the accounting professionals as guides for use in recording and reporting business transaction. Some of them are as follows:
  1. Cost principle
  2. Matching principle
  3. Realization principle
  4. Consistency principle
  5. Dual aspect principle
  6. Objectivity principle
Accounting process:
Accounting process is also called as accounting cycle. It is a complete sequence of accounting activities that are started with the primary entry of transaction into journal and ends with the preparation of final accounts. It is repeated in the same order during each accounting period. It is a continuous process in the life of business organization. Accounting process includes recording, classifying, summarizing and interpreting of financial transactions. The following diagram shows the components of accounting process or cycle.

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