Business entity - Only business transactions are included in the financial statements of a business, Materiality - Some expenses with a very low value are not recorded separately , Cost - Assets and liabilities are recorded at historic cost., Going concern - This presumes that the business will continue to trade in the foreseeable future., Accruals (matching) - Income and expenses are matched to the time period in which they are incurred., Consistency - An accounting policy, once adopted, should be followed each year., Prudence - Where in doubt, a lower figure should be recorded for profits and assets., Realisation - Business transactions should only be recorded when legal title passes., Money measurement - Accounting systems use ‘ money £’ to record and report business transactions, Duality - For every debit there is a credit of equal amounts,

Accounting concepts

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