Accounting principles - Basic Accounting Concepts

Accounting principles - Basic Accounting Concepts

Toothpaste - Accounting principles - Basic Accounting Concepts Good afternoon. Today, I learned about Toothpaste - Accounting principles - Basic Accounting Concepts. Which may be very helpful to me and also you.

There are four basic accounting concepts. The concepts specify and elaborate the guidelines that should be followed when managing the accounting of a business. Below there is a list of the these four basic accounting concepts and a brief overview of each concept. What I said. It just isn't the final outcome that the real about Toothpaste . You look at this article for information about that need to know is Toothpaste . Toothpaste 1. Accruals Concept The accruals view states that earnings from transactions and transactions which cause liabilities are accounted for when they occur, even if cash or asset has not of course been exchanged between the entities complex in the transaction. For example, a dentist, Dr. Payne orders and receives 6 months worth of toothpaste for 0 in January. Even if he does not pay for the toothpaste until February, Dr. Payne should still article the 0 liability in January and not wait until February, since he owns the goods and is liable to pay for them to the supplier. On its turn the victualer will be accounting for the sale of toothpaste to Dr. Payne. 2. Consistency Concept Once definite accounting recipe has been applied by the accountant, this methods must be applied throug all the added periods for the accounting purposes. The accounting recipe should only be changed if there is a valid think that requires the change. For example, if the accountant starts recording transactions using the double-entry accounting recipe in January, he or she should continue applying the double-entry recipe for the remainder of the accounting period. He or she should not begin applying the double-entry recipe and suddenly switch to the single-entry accounting recipe mid-accounting cycle for no identifiable, valid reason. This means that all the accounting methods and procedures must be applied consistently to ensure comparability of information among periods. 3. Going Concern Concept When the accounting of a business is being managed, it should be assumed by the accountant that the business is viable and will still operational in the foreseeable future. If the accountant has any think to believe that the business will not remain viable in the foreseeable future, he or she must state the reasons for coming to that end in the financial reports of the business. If the accountant has an view that the business will not remain in business and there are no sufficient evidence to proof the opposite, the accountant may naturally include a disclaimer in the financial reports stating that he or she believes, but cannot show evidence to prove that the business will not remain viable. 4. Prudency Concept Liabilities are accounted for in the equilibrium sheet even if they is only a possibility for such liabilities to occur, despite they are potential. However, revenues are accounted for in the financial statements only if the business has title for such earnings and has already collected or will procure cash or other assets in the future. If there is a doubt about this or there is no strong legal basis to identify revenue, it is not accounted for in the accounting books. This view helps to ensure that businesses make provisions for possible losses, not just realized losses, and do not erroneously include revenues that are naturally anticipated, but not yet earned. I hope you obtain new knowledge about Toothpaste . Where you can put to used in your day-to-day life. And above all, your reaction is passed about Toothpaste . Read more.. Accounting principles - Basic Accounting Concepts.