Autobiography meaning and definition of accounting concepts

Below mentioned are the generally accepted accounting concepts used widely around the world.

#1 - Entity Concept

The entity concept is a concept that explains to you that your business is different from yours.

It tells you that the business owner and the owner are two separate entities. The statute recognizes the entity as an artificial person. The entity must prepare its own set of financial statements and record its business transactions accordingly.

#2 - Money Measurement Concept

Money Measurement concept states that only those transactions are recorded and measured in monetary terms.

Autobiography meaning and definition of accounting concepts

In simple words, only financial transactions are recorded in books of accounts.

#3 - Periodicity Concept

The periodicity concept states that the entity or the business needs to carry out the accounting for a definite period, usually the financial year.

The period for drawing financial statements can vary from monthly to quarterly to annually. It helps in identifying any changes occurring