Top 5 Basic Concepts of Accounting

There are majorly 8 concepts of accounting but today we will discuss top 5 basic concepts for accounting that will help in accounting assignment writing. These 5 concepts are Entity Concept, Going Concern Concept, Money Measurement Concept, Cost Concept, and Dual Aspect Concept. These Concepts are explained below:- 

Entity Concept: According to the entity concept, owner and business are 2 individual entities and all the business transactions will not be recorded in any personal transaction of the owner. 

Going Concern Concept: As per this concepts business will keep running unless there is any evidence that is contrary to it i.e. It enables firms to employ the accrual basis of accounting, which records revenues and expenses as they are earned or spent rather than as cash is received or paid.

Money Measurement Concept: This concept states that transactions that can be measured in monetary terms will be recorded in accounts i.e. only measurable and relevant information will be added in financial statements. 

Cost Concept: This concept states that the value of an asset will be recorded in its historical value i.e. the value that was paid in cash or cash equivalent while acquiring the assets. 

Dual Aspect Concept: According to this concept every transaction has equal credit and debris i.e the foundation of double entry accounting to maintain Assets = Liabilities + Equity in balance.

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