These notes are provided from studifysuccess
CLASS 11
ACCOUNTANCY
CHAPTER 2: THEORY BASE OF
ACCOUNTING
https://www.studifysuccess.com Made by Krishna Sunish
, These notes are provided from studifysuccess
GAAP – Generally Accepted Accounting Principles (GAAP) is a defined
set of rules and procedures that needs to be followed in order to create
financial statements, which are consistent with the industry standards.
GAAP is developed by the Financial Accounting Standards Board (FASB)
GAAP helps in ensuring that financial reporting is transparent and
uniform across industries. As financial information is based on historical
data, in order to facilitate comparison between data from various
sources, GAAP must be followed.
Accounting Concepts – Accounting concepts are the establishments to
place an interrelated bookkeeping structure in an organization.
Accounting ideas or concepts are exceptionally essential for each
organization, as this helps with staying in check with synchronization
and harmony with the businesses, concerning utilizing a homogenous
accounting concept. Each and every one of these additionally helps in
better analysis. The ideas give the management a bird’s eye view and
assist with handling the accounting framework with a similar tone to
the executives.
Business Entity Concept – The business entity concept is one of the
accounting concepts that states that the business and the owner are
two separate entities and therefore, should be considered separate
from each other. As per this concept, the financial transactions
pertaining to the business entity should be recorded separately from
the business owners’ transactions.
This concept is also known as the Economic Entity Concept, which
means that the owner of the business and the business itself are
considered two separate entities. Therefore, any transactions or events
that impact the business will be recorded and events that impact any
https://www.studifysuccess.com Made by Krishna Sunish
CLASS 11
ACCOUNTANCY
CHAPTER 2: THEORY BASE OF
ACCOUNTING
https://www.studifysuccess.com Made by Krishna Sunish
, These notes are provided from studifysuccess
GAAP – Generally Accepted Accounting Principles (GAAP) is a defined
set of rules and procedures that needs to be followed in order to create
financial statements, which are consistent with the industry standards.
GAAP is developed by the Financial Accounting Standards Board (FASB)
GAAP helps in ensuring that financial reporting is transparent and
uniform across industries. As financial information is based on historical
data, in order to facilitate comparison between data from various
sources, GAAP must be followed.
Accounting Concepts – Accounting concepts are the establishments to
place an interrelated bookkeeping structure in an organization.
Accounting ideas or concepts are exceptionally essential for each
organization, as this helps with staying in check with synchronization
and harmony with the businesses, concerning utilizing a homogenous
accounting concept. Each and every one of these additionally helps in
better analysis. The ideas give the management a bird’s eye view and
assist with handling the accounting framework with a similar tone to
the executives.
Business Entity Concept – The business entity concept is one of the
accounting concepts that states that the business and the owner are
two separate entities and therefore, should be considered separate
from each other. As per this concept, the financial transactions
pertaining to the business entity should be recorded separately from
the business owners’ transactions.
This concept is also known as the Economic Entity Concept, which
means that the owner of the business and the business itself are
considered two separate entities. Therefore, any transactions or events
that impact the business will be recorded and events that impact any
https://www.studifysuccess.com Made by Krishna Sunish
