1...there are three types of accounting principles available:-
1.Personnel Account:-Deals with person individual often company extra.
* Debit the receiver
* Credit the giver
EX: Raj a/c Dr To cash a/c (Being cash paid)
cash a/c Dr To shubash a/c (Being cash received from shubash)
2.Real Account:-Real accounts are those which are tangeble in nature an which the business owns.
* Debit what comes in
* Credit what goes out
Ex:- machinery a/c dr To cash a/c (Being machinery purchased by cash)
purchases a/c dr To cash a/c
3.Nomial Account:- These are accounts other than personel and real includes expences, losses, incomes and gains.
* Debit all expences and losses
* Credit all incomes and gains
Ex: salaries a/c dr To cash a/c (Being salaries paid by cash)
cash a/c dr To sales a/c
2.......Accounting Principles are classified into two categories
A) Accounting concepts
B) Accounting Conventions
A) Accounting concepts
1)Business entity concept - business is separet entity from owner
2)Dual Aspect concept - Liabilities = Assets (dr = cr)
3)Going concern concept - business is going to be in existence for an indefinitely long time.
4)Accounting period concept - Indefinite long period is divided into short span for accounting purpose.
5)Cost concept - cost of aquisition of assets is considered for accounting (considering depriciation) and not current price of assets.
6)Money measurement concept - only facts which can be measured in money find place in accounting.
7)Matching concept - expences and costs incurred during period whether paid or not must match the revenue for that particular period.
B)Accounting Conventions
1) Convention of conservation
2)Convention of Materiality
3)Convention of Consistency
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