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1. PRINCIPLES OF ACCOUNTING Accounting principles are the set guidelines and rules issued by accounting standards like GAAP and IFRS for the companies to follow while recording and presenting the financial information in the books of accounts. These principles help companies present a true and fair representation of financial statements.

2. Business Entity Concept Business and its owners are two separate entities. Hence, businesses and owners can transact with each other an Example of the business entity principle includes that  you are a business owner and borrow money from your company to pay for your child's education . Since it involves using business funds, this withdrawal does not count as a business expense.

3. Going Concern Concept- It is assumed that business will continue in the foreseeable future.

4. Money Measurement Concept- Accounting period- For measuring financial results, working life business is split into short periods called accounting period.Normally it is 1 year i.e 1 st April to 31 st March5. Historical Cost- Accounting is concerned with past events and it requires consistency and comparability that is why it requires the accounting transactions to be recorded at their historical costs and not the current values. This is called historical cost concept.

5. Dual Aspect concept- Every transaction shall have two sided effects of same amount ( Debit and Credit) eg , Cash sales of Rs 2000 . Debit Cash Account Rs 2000 Credit Sales Account Rs 20007. Realisation concept- It tells that revenue is to be recognized only when the rewards and benefits associated with the items sold or service provided is transferred, where the amount can be estimated reliably and when the amount is recoverable. So revenue is recognised when earned ignoring when actual cashflows happen

6.   Matching Concept- Matching concept states that  expenses that are incurred in an accounting period should be matching with the revenue earned during that period . Eg. The Salary paid in 2012-13 relating to 2011-12 is an expense for 2011-12. Accrual concept Accrual accounting is  an accounting method where revenue or expenses are recorded when a transaction occurs vs. when payment is received or made .  examples of Accrual accounting are Sales on credit, purchase on credit, rent paid, electricity expense, depreciation, audit fees, etc.

7. Materiality concept in accounting refers to the concept that all the material items should be reported properly in the financial statements convention of conservatism, also known as the doctrine of prudence, is a policy of anticipating possible future losses but not future gains. Full disclosure principle refers to the concept that suggests that a business should report all the necessary information in their financial statements ,

8. Accounting conventions are guidelines used to help companies determine how to record certain business transactions that have not yet been fully addressed by accounting standards