Accounting Concepts and Qualitative Characteristics of Financial Reporting

Accounting for Business

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
Five accounting concepts.............................................................................................................3
Qualitative characteristics of financial reporting.........................................................................4
CONCLUSION................................................................................................................................5
References........................................................................................................................................6

INTRODUCTION
Accounting for business refers to the systematic recording, recognizing, summarising,
analysing and interpretation of all the financial information which is helpful for the management
of the organisation (Dobija and et.al 2021). The following report demonstrated about accounting
concept which is used for the preparation of financial statements. Besides this, characteristics of
financial reports have been mentioned in this report.
Five accounting concepts
Accounting concepts states about all the rules, regulations and standards which has to be
followed by each and every organisation while preparing financial statements. in short they are
principle which has to get applied on the records of financial transactions.
Money measurement concepts
Accounting is usually deals with the all items who can be expressed in monetary terms.
one of the biggest advantage of money is that it can be denominate the actual value of items and
resources which has been hold by the organisation. when the management is familiar with the
monetary value of their resources then they can easily put them into the financial statements of
the company whether it is a balance sheet or any other income statements.
Going concern concept
This concept is being followed by every organisation because every company wants that
they will conduct their business for life long. in simple, there is no intention of the company that
they are going to shut down in the near future. so this concept is very important for the
preparation of financial statement. This concept state about the value of assets of the company
which will help the investors to know that company has sufficient asset and it will not be going
to shut in the future.
Dual aspect concept
As per the rules of accounting it has been stated that every transaction has two aspects
and both will impact the balance sheet of the company (Yuniarti and et.al 2020). For instance, if
company purchases any assets just like; Machinery then it should have two impact on the
balance sheet. Firstly, it will increase the assets and on the opposite it will decrease the cash as
well.
Business entity concept