Basic Accounting Concepts

Money Measurement
A record is made only of information that can be expressed in monetary terms.
Entity
Accounts are kept for companies, as distinguished from the persons who are associated with these companies.
Going-concern
An entity will continue to operate for an indefinitely long period in the future.
Cost
An asset is entered initially in the accounting records at the price paid to acquire it.
Dual-Aspect
Assets = Liabilities + Owners' Equity
Accounting Period
Accounting measures activities for a specified interval of time.
Conservatism
Recognize revenues only when they are reasonably certain; recognize expenses as soon as they are reasonably possible.
Realization
The amount recognized as revenue is the amount that is reasonably certain to be realized.
Matching
When a given event affects both revenues and expenses, the effect on each should be recognized in the same accounting period.
Consistency
Once an entity has decided on one accounting method, it should use the same method for all subsequent methods of the same character unless it has a sound reason to change methods.
Materiality
Insignificant events may be disregarded, but there must be full disclosure of all important information.