Accounting Concepts & Conventions

Question 1

What are Accounting Concepts ?

Answer 1

These refer to a set of principles set in place to asure accounting information is presented true and in a fair manner.

Question 2

What are Accounting Conventions ?

Answer 2

These are a set of principles that have been established overtime and accepted as the norm

Question 3

What are the Fundamental Concepts ?

Answer 3

Going concern
Seperate Entity
Consistency
Accrual
Conservatism/Prudence

Question 4

What is separate entity ?

Answer 4

This is that your personal finances and business records are separate

Question 5

What is Consistency?

Answer 5

This is the practice of using the same accounting methods and procedures over time

Question 6

What is Accrual ?

Answer 6

a record of an expense that has been earned but not yet paid

Question 7

What is conservatism and prudence

Answer 7

These are concepts that guide the preparation of financial statements.