In order to make the accounting language convey the same meaning to all people and to make it more meaningful, most of the accountant have agreed on number of accounting concept.Accounting Concept

Money Measure conceptRevenue Recognition ConceptAccounting PeriodAccrual ConceptBusiness EntityDual AspectGoing ConcernMatching ConceptACCOUNTING CONCEPT

Business EntityAccording to these concepts, a business is treated as separate entity distinct from its owner.

Money Measure conceptAccounting records only those transactions which are expressed in monetary terms. Transactions which cannot be expressed in money do not find place in the books of accounts.

Going ConcernAccording to this, it is assumed that business will exist for a long time. There is no intention t o liquidate the business in the immediate future.

Accounting PeriodGenerally business concern adopt twelve months period for measuring the income of the concern. This time interval is knownas accounting period

Dual ConceptAccording to this concept, every transaction has two aspects. These two aspects are receiving aspect and giving aspect. These two aspects have to be recorded. The basis of this principle is that for every debit, there is an equal and corresponding credit.

According to this principle revenue is said to be realized when goods or services are sold to be a customer. It emphasizes the fact that the mere receipt of an order for goods or services cannot be taken for the realization of revenue. So advanced payment received from a customer cannot be considered as revenue earnedRevenue Realization Concept

Matching ConceptAccording to this concept, cost of a business of a particular period is compared with the revenue of that period in order to ascertain net profit or net loss.

Accrual ConceptAccording to accrual basis of accounting revenue and expenses are recorded when they occur  or not when  is received or pay out.