CONSISTENCY PRINCIPLE OR CONCEPT · Consistency principle or concept means that once a business has adopted on one accounting method, it should use the same method for all subsequent events of the same character unless it has sound reason to change NOTES: This consistency concept advocates that there must be consistent treatment for similar items … Read more
BUSINESS ENTITY ACCOUNTING PRINCIPLE OR CONCEPT · Owner separate from the business · Company has a separate existence · Affairs of the owners separate from the business NOTES: By understanding this concept, we then realized that all the financial data will only be related directly to the activities of the business. The business is a … Read more
MONEY MEASUREMENT CONCEPT In money measurement concept only financial transactions are recorded Non-financial data are ignored In money measurement concept, Qualitative information are ignored Money measure at the time of transaction, no allowance for changing price level This money measurement concept ignores important economic information Hence by applying money measurement concept, you should realize that … Read more