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प्रश्न
Explain any two basic concepts of accounting.
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उत्तर
- The Revenue Principle: This principle suggests that revenue should be treated as realised whenever the ownership of goods changes. It is immaterial whether the revenue is received in cash or not.
- The Expense Principle: According to this principle, every cost which is incurred to earn revenue is known as expense. Costs incurred on manufacturing, selling and distributing goods and services are expenses. Expenses should be recognised whenever incurred, irrespective of whether cash is paid or not.
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संबंधित प्रश्न
The retirement of manager of the company cannot be recorded in the book of accounts, because it is not possible to estimate the financial effect of retirement. Which accounting principle would be applicable for the above statement?
Define the term GAAP.
Accounting principles are necessary due to which of the following reasons?
It is due to this concept that financial statements are prepared at regular intervals, generally one year.
This principle suggests that every debit has a corresponding and equal credit.
According to this principle, revenue is deemed to be realised when the goods have been transferred or the services have been rendered to a customer.
According to Business Entity Concept:
"The capital provided by the owner is treated as a liability of the firm." Explain the concept on which the above depends.
Explain The Dual Aspect Principle.
Name any four concepts of GAAP.
