Accounting Concepts
Concepts: Concepts are necessary assumptions and conditions upon which accounting is based.
Business entity concept: In accounting, business is treated as separate entity from its owners.While recording the transactions in books, it should be noted that business and owners are separate entities.In the transactions of business, personal transactions of the owners should not be mixed.
For example: - Insurance premium of the owner etc...
Going concern concept: Accounts are recorded and assumed that the business will continue for a long time. It is useful for assessment of goodwill.
Consistency concept: It means that same accounting policies are followed from one period to another.
Accrual concept: It means that financial statements are prepared on merchantile system only.
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