What are the basic accounting principles

Question

Accepted Answer

Basic accounting principles are the foundation of accounting practices and include concepts like accruals, consistency, and materiality.

Accruals: revenue and expenses are recorded when earned/incurred, not when cash is received/paid
Consistency: accounting methods should be consistent from one period to the next
Materiality: only significant items should be reported in financial statements
Going concern: financial statements assume the business will continue operating
Matching: expenses should be matched with the revenue they helped generate
Cost: assets should be recorded at their cost
Objectivity: financial statements should be based on objective evidence
Full disclosure: all relevant information should be disclosed in financial statements

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