Introduction to Accounting Principles

Accounting principles are the foundation of financial reporting. They provide a framework for recording and reporting financial transactions, ensuring consistency and transparency. In this article, we will explore the key accounting principles that every accountant should know.

Key Principles

• Accrual Principle: Revenues and expenses are recorded when they are earned or incurred, not when cash is exchanged.
• Consistency Principle: Once an accounting method is adopted, it should be used consistently throughout the financial reporting period.
• Going Concern Principle: Assumes that a business will continue to operate indefinitely unless there is evidence to the contrary.

Understanding these principles is crucial for accurate financial reporting and analysis.