ACCOUNTING CONCEPTS

1. Cost concept: Assets are normally shown at cost price
2. Money measurement concept: The concept that accounting is concerned only with facts measurable in    money, and for which measurement can obtain general agreement.
3. The business entity concept: Assumption that only transactions that effect firm and not the owner’s private transactions will be recorded. 
4. The dual aspect concept: The concept that each transaction is recorded by taking both aspects, debit and credit.
5. Accrual concept: The concept that profit is the difference between revenue and expenditure.
6. Going concern concept: The assumption that the business will continue to operate for the foreseeable future or continue for a long time 
7. Materiality concept: Recording something is a special way only if the amount is not a small one. 
8. Subjectivity: Using a method that other people may not agree to derived from one’s own personal preferences. 
9. Prudence: Ensuring that profit is not shown as being too high or that assets are shown at too high value.
10.  Consistency: Each firm should follow constant method of treatment for each item. If the method is changing every year, then the profit calculated will be misleading one
11. Time interval concept: Final accounts are prepared at regular intervals.