Accounting principles
Accounting principles are the foundational guidelines and rules that govern how financial transactions are recorded and reported. They ensure consistency, reliability, and transparency in financial statements. Key principles include the Revenue Recognition Principle, which dictates when income is recognized, and the Matching Principle, which aligns expenses with related revenues. The Cost Principle states that assets are recorded at their original purchase price. Together, these principles help businesses provide accurate financial information, making it easier for stakeholders to assess performance and make informed decisions.
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Accounting principles are the fundamental guidelines that govern financial reporting and record-keeping. Key principles include the **Revenue Recognition Principle**, which dictates when income is recorded; the **Matching Principle**, ensuring expenses are recorded in the same period as the revenues they help generate; the **Cost Principle**, which states assets are recorded at their purchase price; and the **Full Disclosure Principle**, requiring complete transparency in financial statements. These principles aim to create consistency and reliability in financial reporting, helping stakeholders make informed decisions based on accurate financial information.