The Various Accounting Concepts

Through online accounting homework help, the students can get vital and recent information about the various topics covered in accounting as mentioned below which will enable them to gain good scores in examinations as well as in submitting their assignments.

Accounting concepts:
The various terms used for describing the basic ideas are: concepts, postulates, propositions, basic assumptions, underlying principles, fundamentals, conventions, doctrines, rules etc.
Business entity concepts:

In accounting we make a distinction between business and the owner. All the records are kept from the viewpoint of the business rather than from that of the owner. An enterprise is an economic unit separate and apart from the owner or owners.

In the case of a limited company, a company has legal entity (or personality) of its own. Like a natural person, it can engage itself in economic activities of producing, owning, managing, storing, transferring, lending, borrowing and consuming commodities and services.
One reason for the distinction is to make it possible for the owners to have an account of the performance from those who manage the enterprise.

Money measurement concept:
In accounting, only those facts which can be expressed in terms of money are recorded. As money is accepted not only as a medium of exchange but also as a store of value, it has a very important advantage since a number of widely different assets and equities can be expressed in terms of a common denominator.
Secondly, use of money implies that a rupee today is of equal value to a rupee ten years back or tern years later. In other words, we assume stable or constant value of rupee. In the accounts, money is expressed in terms of its value at the time an event is recorded.

Continuity concept:
Accounting assumes that the business (an accounting entry) will continue to operate for a long time in the future unless there is a good evidence to the contrary. The enterprise is viewed as a going concern. It means it is continuing in operation, at least in the foreseeable future.
The assumption is of considerable importance for it means that the business is viewed as a mechanism for adding value to resources it uses. The success of the business can be measured by the difference between output values (sales or revenues) and input values (expenses). Therefore, all unused resources can be reported at cost rather than at market values.

Cost concept:
The resources (land, buildings, machinery, property rights etc) that a business owns, are called assets. The money values that are assigned to asset are derived from the cost concept. As per this concept, an asset is worth the price paid for or cost incurred to acquire it.
The cost concept does not mean that all assets remain on the accounting records at their original cost for all time to come.

Accrual concept:
The accrual concept makes a distinction between the receipt of cash and the right to receive it and the payment of cash and the legal obligation to pay it. The accrual concept recognises this distinction. The accrual concept provides a guideline to the accountant as to how he should treat the cash receipt and the rights related thereto.
Apart from the concepts mentioned above, the following concepts like accounting concepts: Concept of conservatism, materiality concept, consistency concept and periodicity concept are also important.

Reference: http://classof1/cp,