7 Basic Accounting Principles
Let’s take a look at very basic foundations of the accounting practice. It is important for accountants all over the world to follow the same accounting principles. In other words, Final Accounts ought to be based on the same basic concepts.
Otherwise, it would be impossible to make comparisons between Final Accounts from different firms based in different countries. It would also cause huge problems for multinational companies which operate in many countries around the world, if basic accounting principles in the home country are different from those in each foreign country.
The following brief explanation of these seven basic accounting concepts will help to make key accounting principles clearer.