Principles of Accounting

Principles of accounting are a set of fundamental rules that ensure financial information is accurate, consistent, and comparable. They guide how businesses record, summarize, and report financial transactions, providing a clear picture of financial health. Key principles include consistency (applying methods uniformly), reliability (accurate and verified data), and transparency (clear and truthful reporting). These principles help stakeholders—like owners, investors, and regulators—make informed decisions based on trustworthy financial statements. Overall, they create a standard framework that enables clear communication and accountability in financial reporting.