WHAT ARE THE PRINCIPLES OF ACCOUNTING

The principles of accounting are the building blocks for GAAP(Generally Accepted Accounting Principles). All of the standards and concepts in GAAP can be traced back to the core accounting principles. A number of accounting principles come from long-used accounting practices, however, others come from ruling making bodies like the FASB(Financial Accounting Standards Board).

It’s essential to have a basic understanding of these fundamental principles of accounting as you learn accounting. This isn’t just memorizing some of the principles for a test and then forgetting it a few days later. These accounting principles are also used by many accounting consulting firms as well. Trust me. Once you know the basic principles of accounting, the accounting will make more sense to you. 

You will be able to use these accounting principles and reason your way through the expense, revenue, and any other combination of complications later on in the accounting process.

PRINCIPLES OF ACCOUNTING

Below mentioned is a list of some basic accounting principles that make up GAAP in the U.S.

• Revenue Recognition Principle
• Historical Cost Principle
• Full Disclosure Principle
• Matching Principle
• Conservatism Principle
• Cost Benefit Principle
• Objectivity Principle
• Consistency Principle
• Economic Entity Principle
• Accrual Principle