Accounting concept refers to the Basic assumptions Rules Principles which work as the basis of recording of business transactions and preparing accounts.

1. CONCEPTS OF ACCOUNTING
Mr. Satyanath Mohapatra
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2. Accounting concept refers to the
• Basic assumptions
• Rules
• Principles
which work as the basis of recording of business transactions and
preparing accounts.
The main objective is to
• Maintain uniformity
• Clarity
in accounting records.

3. • Business entity concept
• Money measurement concept
• Going concern concept
• Accounting period concept
• Accounting cost concept
• Duality aspect concept
• Realisation concept
• Accrual concept
• Matching concept
Various Accounting concepts

4. Business Entity Concept
The business enterprise and
its owners are two separate
independent entities. Thus,
the business and personal
transactions of its owner are
separate.

5. Money measurement concept
Only those business
transactions will be recorded
which can be expressed in
terms of money.

6. This concept states that a
business firm will continue to
carry on its activities for an
indefinite period of time.
Going concern concept

7. Accounting period concept
All the transactions are recorded in
the books of accounts on the
assumption that profits on these
transactions are to be ascertained
for a specified period.

8. Accounting cost concept
The price of an asset must be
recorded as actual cost paid to
acquire it. Which includes cost of
acquisition, transportation and
installation. It doesn’t consider
the market value.

9. Duality aspect concept
The dual aspect concept states that every business transaction
requires recordation in two different accounts.
Where you are giving some value means
you are also receiving some value.
The concept is commonly expressed as the accounting equation,
which states that:

10. Realisation concept
This concept states that revenue from
any business transaction should be
included in the accounting records
only when it is realised.
It Implies the accounting should not
take in to consideration any
anticipated profit.

11. Accrual concept
The revenues are recorded when
they become receivable whether
received or not,
and the expenses are recognized
when they become payable
whether paid or not.

12. Matching concept
The revenue and the
expenses incurred to earn
the revenues must belong
to the same accounting
period.

13. Accounting concept refers to the basic
assumptions which serve the basis of
recording actual business transactions.