GAAP: Accounting Assumptions, Conventions, Conventions

GAAP are rules of action which are derived from experience and practice and they prove useful and become Generally Accepted Accounting Principles.

5 Accounting Principles

5 accounting principles are; (1) revenue recognition principle, (2) historical cost principle, (3) matching principle, (4) full disclosure principle, and (5) objectivity principle.

4 Accounting Assumptions

4 accounting assumptions are; (1) business entity assumption, (2) money measurement assumption, (3) going concern assumption and (4) accounting period assumption.

Accounting Equation: How Transactions Affects Accounting Equation?

Accounting Equation indicates that for every debit there must be an equal credit. assets, liabilities and owners’ equity are the three components of it. Accounting equation suggests that for every debit there must be a credit. Accounting is a way of getting information about the transactions and events within the business in reports that are…