Accounting Concepts - Meaning – Explanation
Accounting Concepts are those fundamental basic and generally accepted rules which are used while preparing the financial statements. Accounting Concepts are parts of Accounting Principles A nd Generally Accepted Accounting Principles (GAAP) . Following are the most important accounting concepts of Accounting: 1. Business Entity / Separate Entity Concept A business entity is an independent entity and which is separated from the owners. All the Transactions are recorded from the point of view of the business. The business entity has its own assets and liabilities. Personal transactions of owner are not taken into account and are not recorded in the books of accounts of the business. Only those transactions of the owners are recorded that affect the financial position of the business. For Examples in case of transactions for Capital and Drawings, these transactions are recorded in the books of business. ...