1. Accounting Concepts 1

2. Accounting or Business Entity  Business is separate and distinct from its owners Example – your personal bank account vs. that of your company 2

3. Going Concern Business is a continuing enterprise and will exist for an indefinite period 3

4. Money Measurement  Transactions which can be expressed in monetary terms are only recorded.  Money is a stable measurement unit 4

5. Accounting Period a business’ lifetime can be divided into different time periods for reporting Most common time period is 1 year 5

6. Dual Aspect Every business transaction has two aspects. E.g. : A starts business starts business with capital of Rs10,00,000. There are 2 aspects of this transaction, on one hand the business has asset of Rs10,00,000 and on the other it has to pay to the proprietor Rs10,00,000 6

7. 7 Generally Accepted Accounting Principles and Accounting Standards  What is GAAP?  Importance of GAAP  Why does accounting practice differ?  Accounting policies  Need for accounting standards  Standard-setting mechanism in India