Principles of Accounting


The concept describes the purpose and importance of accounting principles. It explains the advantages and disadvantages of accounting principles and provides case study evidence as well as implementation advice.

Technique Overview

Principles of Accounting Definition

An 'accounting principle' is a methodology used to measure and report the monetary effects of economic events in financial statements. Acceptable principles are prescribed either by standard-setting bodies or, in the absence of relevant pronouncements, are followed by the organisations engaged in economic transactions in the same industry or profession. These principles of accounting consider both the accounting practices and their applications. The basic principles are: (1) measurement, (2) revenue recognition, (3) expense recognition and (4) full disclosure (Kieso et al., 2010).

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Business Evidence

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Business Application

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Further Reading

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Principles of Accounting References (4 of up to 20) *

  • Argyris, C. (1999). On organizational learning. Wiley-Blackwell.
  • Barton, D., Coombes, P., Wong, S.C. (2004). Asia's governance challenge. Mckinsey Quarterly, May 2004. Available at: [Accesed on 16 January 2012]
  • Bhattacharyya, A. (2006) Financial Accounting for Business Managers, Prentice Hall, New Delhi.
  • Beckett, R., Jonker, J. (2002). AccountAbility 1000: a new social standard for building sustainability. Managerial Auditing Journal, 17(1/2), pp.36-42.

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