Tell 3 principles of Accounting

Question

Accepted Answer

The three principles of accounting are the revenue recognition principle, the matching principle, and the historical cost principle.

Revenue recognition principle: Revenue is recognized when it is earned, not necessarily when cash is received. For example, a company sells goods on credit and recognizes the revenue at the time of sale.
Matching principle: Expenses should be matched with revenues in the period they are incurred, not necessarily when they are paid. For example, if a company incurs expenses for producing goods, those expenses should be matched with the revenue from selling those goods.
Historical cost principle: Assets should be recorded at their original cost when acquired. For example, if a company purchases a piece of equipment for $10,000, it should be recorded on the balance sheet at $10,000.