TONDAG, ERICH MAE P.

CONFRAST

ACC 102

ACCOUNTING CONCEPTS

1. Going Concern – This concept presumes that a company will keep

running for the foreseeable future.
2. Business Entity – This accounting concept separates the business
from its owner
3. Materiality – Permits a comprehensive overall look at a business.
4. Accruals – Guides how you record all your cash and credit
transactions.
5. Consistency – The consistency accounting concept is an approach
that aims to maintain consistency throughout all company accounting
records.
6. Money Measurement – Money Measurement concept states that only
those transactions are recorded and measured in monetary terms.
7. Objectivity Concept – The objectivity concept of accounting states
that an organization should record transactions in an objective manner.
8. Financial Statement – Formal record of the financial activities and
position of a business, organization or individual.
9. Matching Concept – The income for the period should be matched
with the expenses incurred
10. Time Period – Need to be sure to recognize revenues and
expenses in the proper period.
11. Assets – Assets are resources a business owns that bring it
economic benefits.
12. Blance Sheets – Financial statements provides insight into a
businesses assets, liabilities and shareholders equity at a certain point
in time.
13. Conservation – When two values of transaction are available,
the lower value transaction is recorded.
14. Accounting Period – You define a specific time period for
reporting your financial records.
15. Dual Aspect – The foundation of accounting, or its basic
principles.
16. Cost Concept – Any asset that the entity records shall be
recorded at historical cost value.
 17. Realisation – Income should be recognized when it us earned,
regardless of when payment is received.
18. Accounting Concept – Uniform standard that businesses use to
organize their financial transaction.
19. Prudence – Speculation doesn’t influence the reporting of
financial data
20. Accounts – A form of transaction such as cash or sales.

ACCOUNTING PRINCIPLES

1. Accrual principle – The accrual principle requires companies to

record revenue and expenses in the period in which they are earned or
incurred, regardless of when cash is exchanged.
2. Concervatism – Requires accountants to err on the side of caution
when reporting financial information.
3. Consistency – Requires companies to use the same accounting
methods and procedures from one period to the next.
4. Cost Principle – The cost principle requires assets to be recorded at
their original purchase price, rather than their current market value.
5. Materiality Principle – This principle helps ensure that financial
statements are relevant and not cluttered with immaterial details.
6. Matching Principle – The matching principle requires companies to
match expenses with the revenues they generate.
7. Revenue Recognition – This principle ensures that financial
statements accurately reflect a company’s financial performance and
that revenue is not overstated.
8. Time Period – The time period principle requires companies to report
financial information on a regular basis, typically quarterly or annually.
9. Entity Principle – The entity principle requires companies to treat
themselves as separate entities from their owners.
10. Full Disclosure – This principle ensures that investors and
creditors have a complete understanding of a company’s financial
position and can make informed decisions based on that information.
11. Objectivity Principle – This principle helps ensure that financial
statements are reliable and accurate.
12. Realization Principle – The realization principle requires
companies to recognize revenue only when it has been fully earned,
and expenses only when they have been incurred.
13. Substance over form – The substance over form principle
requires companies to account for the economic substance of a
transaction, rather than its legal form.
14. Understandability – This principle helps ensure that financial
statements are accessible to a wide range of stakeholders.
15. Verifiability – This principle helps ensure that financial
statements are reliable and accurate.
16. Materiality Threshold – The materiality threshold is a
quantitative threshold that helps determine which information should
be included in financial statements.
17. Relevance Principle – The relevance principle requires financial
information to be relevant to the decision-making needs of users.
18. Completeness Principle – The completeness principle requires
financial statements to include all relevant information necessary for a
user to make informed decisions.
19. Cost-benefit Principle – This principle helps ensure that
financial statements provide useful information without being
excessively costly to prepare.
20. Conclusion – These principles provide a solid framework for
financial reporting and ensure that financial statements accurately
reflect a company’s financial position and performance.

THEORY

1. Historical Cost Theory

2. Matching Principle
3. Revenue Recognition
4. Traditional accounting theory
5. Entity Theory
6. Accounting Theory
7. Institutional Theory
8. Structuration
9. Agency Theory
10. A Dynamic Theory of Personality
11. American Dream Theory
12. Attribution Theory
13. Benefit Theory
14. Broken Trust Theory
15. Contracting Theory
 16. Contemporary Theory of Wages
17. Cognitive Dissonance Theory
18. Enterprise theory
19. Equity Theory
20. Finance Theory

STANDARDS

1. Presentation of financial statements

2. Inventories

3. Statement of cash flows

4. Accounting policies, changes in accounting estimates, and errors

5. Events after the reporting period

6. Income taxes

7. Leases

8. Employee benefits

9. The effects of changes in foreign exchange rates

10. Financial reporting in hyperinflationary economies

11. Disclosure of accounting policies

12. Valuation of inventories

13. Cash flow statements

14. Contingencies and events occurring after the balance sheet date

15. Property, plant, and equipment.

16. Borrowing Costs

17. Accounting for investment

18. Depreciation Accounting

19. Property, Plant and Equipment

20. Business Combinations