What are fundamental rules of accounting

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Accepted Answer

Fundamental rules of accounting include the principles of consistency, conservatism, materiality, and others.

The principle of consistency states that once an accounting method is chosen, it should be consistently applied.
The principle of conservatism suggests that when in doubt, accountants should choose the option that is least likely to overstate assets and income.
The principle of materiality states that only significant items need to be reported in financial statements.
Other fundamental rules include the principles of relevance, reliability, and comparability.
Examples of applying these rules include using the same depreciation method for all assets, valuing inventory at the lower of cost or market value, and disclosing significant events in financial statements.

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