Accounting Concepts

|Term-Concepts |Definition |
|Purpose of Accounting |Communicating financial information to end users so they can make informed decisions. |
|Accounting Entity |The financial affairs of the business are separate and distinct from the financial affairs of the owner. |
|Monetary Concept |All transactions are recorded in a common dollar term such as the New Zealand dollar. |
|Historical Cost Concept |All transactions are recorded at their original purchase cost to the business. |
|The Going Concern Concept |The financial statements are prepared on the assumption that the business will continue to operate in the|
| |foreseeable future. |
|Period Reporting Concept |Entities present financial statements on an annual basis to make comparisons with other years. |
|Accrual Basis |Transactions are recognised when they occur and are reported in the financial statements of the period |
| |which they relate. |
| | |
| Term-Specialised areas of |Definition |
|accounting | |
|Accounting Clerks/Technicians |Support professionals who help to record and prepare accounts and statements, and