When the accounting principles and practices are uniformly/consistently followed from year to year that the result obtained will be comparable. This interval may be quarterly, half-yearly and one year. Accounting period is usually a period of one year and that year may be financial year or calendar year. According to ________ of accounting assumption, Revenue and expenses are recognised in the period in which they occur rather when they are received or paid. The business firm will not dissolve until it is required by the law. The rules and conventions of accounting are commonly referred to as principles. E.g. According to this principle, apart from legal requirements all significant and material information relating to the economic affairs of the entity should be completely disclosed in its financial statement and accompanying footnotes. We Database of more then 20K CBSE Tutors, Millions of CBSE Students, Teachers and Principals. If they are not followed, then reasons should be disclosed for not following them. As per income tax law, tax on income is calculated on annual basis from 1st April to 31st March (Financial Year). , the firm and its owners are considered as 2 distinct persons. E.g. CBSE Accountancy Class XI ( By Mr. Kailash Gururani ) These concepts are mentioned below: There are 3 basic Accounting Assumptions: The above mentioned is the concept, that is elucidated in detail about the ‘Theory Base of Accounting’ for the Class 11 Commerce students. General objectives Students will familiarize themselves about different accounting principles . (1) 3 (2) 4 (3) 5 (4) 10 Ans (5) ... and sample papers. According to this principle, business is treated as an entity, which is separate and distinct from its owner. These rules are known by different names such as principles, concepts, conventions, postulates, assumptions and modifying principles. 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Ignore provision for discount on creditors. Theory Base of Accounting concepts are fundamentally the basic ideas holding the theory base of accounting and therefore, can be regarded as general working practices for all accounting activities. As per this assumption, revenue is recognized when it is accrued/ earned, that is, when sale is complete or services are rendered. Then the expenses of salary will be recorded in the current year in which salary is due, not in the next year in which it will be paid. Accounting principles - ACCOUNTANCY FOR CLASS 11. According to this assumption, accounting policies and practices once selected and adopted are followed every year. The cost concept is traditional in nature as a particular amount concerning the asset is paid on the date of purchase and does not change year after year. They should be applied consistently over the period of time. Hence, when an owner brings in capital into the firm, it is considered as a liability of the business. If a machinery purchased is expected to last (to be used for) next 10 year, then the cost of machinery will be spread over the next 10 year for calculating net profit or loss of each year (Dep. Example : purchases cost ϕ 15,000 will be recorded in the books of accounts but the good human relationship within organization will not be recorded. Having Listing of CBSE and Non CBSE Schools with Alumni associated with schools. Email Id : [email protected]. In CBSEGuess you can download CBSE Board Papers from the archies of 50K CBSE Sample Papers, Guess Papers and Question Bank. Theory Base of Accounting Class 11: Basic Concepts. General details Pupil teacher name: Pooja jain & Vandana sharma Subjects: Accountancy Class: XI Topic: Accounting principles 3. : Cost concept requires that all the assets must be recorded in the books of accounts at the price at which they were bought, which involves the cost incurred for transportation, installation and acquisition. 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