The various terms used for describing the basic ideas are: concepts, postulates, propositions, basic assumptions, underlying principles, fundamentals, conventions, doctrines, rules etc. Business entity concepts:
In accounting we make a distinction between business and the owner. All the records are kept from the viewpoint of the business rather than from that of the owner. An enterprise is an economic unit separate and apart from the owner or owners.
In the case of a limited company, a company has legal entity (or personality) of its own. Like a natural person, it can engage itself in economic activities of producing, owning, managing, storing, transferring, lending, borrowing and consuming commodities and services. One reason for the distinction is to make it possible for the owners to have an account of the performance from those who manage the enterprise.
Money measurement concept:
In accounting, only those facts which can be expressed in terms of money are recorded. As money is accepted not only as a medium of exchange but also as a store of value, it has a very important advantage since a number of widely different assets and equities can be expressed in terms of a common denominator. Secondly, use of money implies that a rupee today is of equal value to a rupee ten years back or tern years later. In other words, we assume stable or constant value of rupee. In the accounts, money is expressed in terms of its value at the time an event is recorded.
Accounting assumes that the business (an accounting entry) will continue to operate for a long time in the future unless there is a good evidence to the contrary. The enterprise is viewed as a going...