Accounting Concepts Basic concepts For business operation For

Accounting Concepts Basic concepts For business operation For quality of financial statements

Basic Concepts ü Objectivity ü Business Entity Concept ü Money Measurement Concept ü Going Concern Concept Back

Objectivity All accounting figures recorded in the books MUST be verified. Office Furniture $18, 000 $ 18, 000 Back

Business Entity Concept Business is an individual legal person. It has its own assets different from those of the owner. Will it be appeared on the balance sheet of the business? The owner $300 Back

Money Measurement Concept All recorded transactions MUST be quantified. My monthly salary is $9, 000. I am very honest. My honesty is worth $100, 000. Which one should be recorded in the book? Back

For business operation ü Historical Cost Concept ü Realization Concept ü Accrual Concept Back

Historical Cost Concept This year, the apartment is worth $3 million. $ 1 million How much should be shown on the balance sheet this year? Back

Realization Concept Revenue Monthly rent received : $2, 000 $25, 000 How much should be recorded in Rent Received Account this year? Back

Accrual Concept Expense Electricity Jan $900 Feb 800 Mar 750 $2, 200 How much should be recorded in Electricity Account this year? Back

For quality of financial statement ü Consistency Concept ü Materiality Concept ü Prudence Concept Back

Materiality Concept $15 Will it be recorded as EXPENSE or FIXED ASSET ? Back