Accrual concept implies that revenue is recognized in the period in which it is earned irrespective of the fact whether it is received or not during that period. In the same way expenses are recorded when they are incurred and not when they are paid.
For example, commission Rs. 2,000 earned in the year 2008, but received in cash in the year 2009, then the commission is to be taken as income for the year 2008 only, not as income of the year 2009.
According to this concept, proprietor and business are two different entities. Business Entity Concept ensures that transactions are recorded from the point of view of business, not proprietor. Now to
As per this concept all business transactions must be in terms of money. Thus, as per the money measurement concept, transactions which are of financial nature are only recorded in
Asset in financial accounting is the property of a business that has money value, benefit for which can be availed in future or it can be converted into cash. Some
