Accounting Principles

Question 1

What are the Accounting principles?

Answer 1

Going Concern
Historical Cost
Periodicity/Time Period Concept
Money Measurement
Separate Entity

Question 2

What is going concern ?

Answer 2

This is assuming that a business will continue to operate indefinitely for the predicted future.

Question 3

What is Historical Cost ?

Answer 3

Historical cost is the original price paid to purchase an asset or liability

Question 4

What is Periodicity?

Answer 4

This divides a business’s life into time periods to generate financial statements

Question 5

What is Money Measurement ?

Answer 5

Money measurement states that only transactions with a monetary value should be recorded in a company’s financial statements.

Question 6

Seperate Entity

Answer 6

This is when the business keeps its finances separate from the personal assets of anyone with a stake in the company.

Question 7

Double entry

Answer 7

records every financial transaction twice, once as a debit and once as a credit making them equal