The statute recognizes the entity as an artificial person. It tells you that the business owner and the owner are two separate entities. The entity concept is a concept that explains to you that your business is different from yours. Source: Accounting Concept () Top 12 Accounting Conceptsīelow mentioned are the generally accepted accounting concepts Generally Accepted Accounting Concepts GAAP (Generally Accepted Accounting Principles) are standardized guidelines for accounting and financial reporting.
#Fundamental accounting principles pdf how to#
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Financial Data about individuals like past Months Bank Statement, Tax return receipts helps banks to understand customer’s credit quality, repayment capacity etc.
It aims to achieve a common understanding of rules or assumptions to be followed by all types of entities, thereby facilitating comprehensive and comparable financial information Financial Information Financial Information refers to the summarized data of monetary transactions that is helpful to investors in understanding company’s profitability, their assets, and growth prospects.It acts as the underlying principle that assists accountants in preparing and maintaining business records.These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels. The main objective is to achieve uniformity and consistency in preparing and maintaining financial statements Financial Statements Financial statements are written reports prepared by a company's management to present the company's financial affairs over a given period (quarter, six monthly or yearly).
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