Account presentation

1. ACCOUNTING CONCEPTS
COST CONCEPT AND MATCHING CONCEPT
PRESENTED BY :-
ANUSHKA DAS
ADITYA SIWAKOTI
SIDDHARTHA GURUNG

2. ACKNOWLEDGEMENT
I would like to thank you college and
department of accountancy for providing
us golden opportunity to present ourself
to the class in the given topic.

3. TABLE OF CONTENTS
1. What is accounting
2. Accounting concepts
3. Types of basic accounting concepts
4. Cost concept
5. Types of cost concept
6. Advantages of cost concept
7. Matching concept
8. Advantages of matching conceptadvantages of matching concept

4. WHAT IS ACCOUNTING?
If accounting is the process of recording
classifying and summarizing financial
transactions of a business. It is creative in nature
as it needs judgement to present and interpret
financial information. It’s main purpose is to as
certain the profit or loss and the financial
position of the business. It is a whole in itself and
include book keeping in its fold. It is maintained
by qualified person called an accountant. It needs
specialised knowledge and skills to perform it.

5. WHAT IS ACCOUNTING CONCEPTS?
Accounting concepts are the foundations of
accounting theory. They are ground rules for
understanding the process of accounting. They
are the basis for formulating the accounting
principles methods and procedures. Therefore
accounting concepts are the fundamental
accounting assumptions that act as a
foundation for recording measuring and
presenting business transactions and
preparation of financial statements.

6. BASIC ACCOUNTING CONCEPTS
Accounting concepts as a foundations of
accounting theory. The basic accounting concepts
are
1. Business entity concept
2. Money measurement concept
3. Accounting period concept
4. Going concern concept

7. COST CONCEPT
The concept of cost is a key concept in Economics. It
refers to the amount of payment made to acquire any
goods and services. In a simpler way, the concept of
cost is a financial valuation of resources, materials, risks,
time and utilities consumed to purchase goods and
services. From an economist’s point of view, the cost of
manufacturing any goods and services is often said to
be the concept of opportunity cost

8. TYPES OF COST CONCEPT
The different types of cost concepts are
1. Outlay costs and Opportunity costs
2. Accounting costs and Economic costs
3. Direct/Traceable costs and Indirect/Untraceable costsIncremental
costs and
4. Sunk costs
5. Private costs and social costs
6. Fixed costs and Variable costs

9. ADVANTAGES OF COST CONCEPT
The cost principle is a popular accounting
method because it’s simple, straightforward and
conservative. It lets businesses easily identify,
verify and maintain expenses over time – without
having to update the value of assets from period
to period.

10. MATCHING CONCEPT
The matching principle is an accounting concept
that dictates that companies report expenses at the
same time as the revenues they are related to.
Revenues and expenses are matched on the
income statement for a period of time (e.g., a year,
quarter, or month).Several examples of the
matching principle are noted below, for
commissions, depreciation, bonus payments,
wages, and the cost of goods sold.

11. ADVANTAGES OF MATCHING CONCEPTS
There are several advantages to using the matching
principle. First, it minimizes the risk of misstating
whether a business has generated a profit or loss in
any given reporting period. This is particularly
important when a firm generally operates near a
breakeven level. It also results in more consistent
reporting of profits across reporting periods,
minimizing large fluctuations.