Accounting Concepts

Accounting concepts are foundational ideas that guide how financial information is recorded and reported. They ensure consistency, accuracy, and fairness in financial statements. Key concepts include going concern (business will continue operating), accrual basis (record transactions when they happen, not when cash changes hands), consistency (use the same methods over time), and prudence (be conservative in estimates). These principles help stakeholders understand and trust a company's financial health, supporting informed decision-making.