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According to this principle, only those transactions that are measured in money or can be translated in term of money are recorded in the books of accounts of the enterprises. Introduction to Accounting, Theory Base of Accounting, Recording of Transaction - I, Recording of Transaction - II, Bank Reconciliation Statement, Trial Balance and Rectification of Errors, Depreciation, Provision, and Reserves, Bill of Exchange, Financial Statements - I, Financial Statements – II, Accounts from Incomplete Records, Applications of Computers in Accounting… Charged.). E.g. Required fields are marked *, Class 11 Accountancy Chapter 2 Theory Base Of Accounting, Theory Base of Accounting Class 11: Basic Concepts, : The concept of business entity says that a business is a separate entity from its owners. When the accounting principles and practices are uniformly/consistently followed from year to year that the result obtained will be comparable. These rules are known by different names such as principles, concepts, conventions, postulates, assumptions and modifying principles. Email Id : [email protected]. Accounting statements are prepared at the end of this accounting period. Same Accounting practices will be followed for similar items year after year. Market value of the asset is irrelevant and is not recorded in the balance sheet, as these assets are not going to be sold in the near future. e.g. If a firm adopts one method in the previous year and the other method in next year, the result will not be comparable. if at the end of year the two month salary is due but not paid. These concepts are mentioned below: There are 3 basic Accounting Assumptions: The above mentioned is the concept, that is elucidated in detail about the ‘Theory Base of Accounting’ for the Class 11 Commerce students. CBSE Guess having millions of pages of educational papers provided by various educational institutions, teachers and educators from India and abroad. According to ________ of accounting assumption, Revenue and expenses are recognised in the period in which they occur rather when they are received or paid. Q.2-_______ assumption means neither any intention to close down the business nor any necessity. It helps in the comparative study of financial statement of the current year with that of the previous year. The rules and conventions of accounting are commonly referred to as principles. General objectives Students will familiarize themselves about different accounting principles . Similarly, Expense is also recognised when goods and services are purchased, and obligation is created to pay for them. The american institute of certified public accountants has defined the accounting principle as, “a general law or rule adopted or professed as a guide to action; a settled ground or basis of conduct or practice”. Having Listing of CBSE and Non CBSE Schools with Alumni associated with schools. : Accounting period is the timeframe at the end of which, the. Your email address will not be published. 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