Golden rules of Accounting, Accrual & Matching Concept.

Question

Accepted Answer

Golden rules of Accounting, Accrual & Matching Concept.

Golden rules of accounting include the accounting equation, double-entry accounting, and the concept of debits and credits
Accrual concept states that revenue and expenses should be recognized when earned or incurred, regardless of when cash is received or paid
Matching concept states that expenses should be matched with the revenue they helped generate in the same accounting period
For example, if a company sells goods on credit in December, the revenue should be recognized in December even if the cash is received in January
Similarly, if a company incurs expenses in December to produce goods that are sold in January, the expenses should be recognized in December

Accepted Answer

Golden Rules of Accounting include the accounting equation, double-entry accounting, and the concept of debits and credits.

The accrual concept states that revenue and expenses should be recognized when earned or incurred, regardless of when cash is received or paid.

The matching concept states that the expenses should be matched with the revenue they helped generate in the same accounting period (Financial Year).

For example, if a company sells goods in credit in January, the revenue should be recognized in January even if the cash is received in February.

Similarly, if a company incurs expenses in February to produce goods that are sold in March, the expenses should be recognized in January.

Accepted Answer

Personal-Debit the receiver credit giver, Naminal- Debit all expenses and losses Credit all incomes and Gain's,

RealReal- Debit what comes in credit what goes out

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