Concept Of Accounting Concepts

Introduction
The accounting concepts are imply in the financial statements prepared by the business. This is to ensure that the users of accounting could get a better and accurate information. There are several accounting concepts like business entity concept, going concern concept, money measurement concept, accounting period, dual aspect concept and so on. They are apply in the books of accounting, so that the reports publish are accurate and accepted by general public. These accounting concepts are useful in preparing the accounts like it could maintain the consistency of the accounts information and reduce errors made in the books. However, there are also a few limitations for each accounting concepts, such as money measurement concept

It states that the value of assets owned by the business is equal to the claims on these assets. For example, when a business owner injects capital into the business, the assets will increase with the same value as the equity of the business. If the company borrows loan from banks, not just the liabilities of the business increases, however the assets which is the bank account also increases with the equal amount as the liabilities. Hence, as the dual concept stated, assets of the business will always equals to the equity and liabilities of the

There are different accounting concepts with different uses which are apply in the books of accounting. It is important to imply these concepts in the books to ensure the accuracy of the accounts and make it much easier for the users of accountings to compare the financial statements of the companies. This is very helpful for them to make important decision and take appropriate actions to continue to generate income from the business. However, accounting concepts also have its limitations as it cannot definitely helps to ensure the accuracy of the reports. So, when we are recording the business transactions, we should also be cautious to avoid making errors in the