These basic principles form the basis which modern accounting is based. The best-known of these principles are as follows:
The Accrual Principle: The concept that accounting transactions should be recorded in the periods when they actually occur; Ignoring this principle would cause delays in payments.
The Conservatism Principle: This is the concept that you should record expenses and liabilities as soon as possible, but record revenues and assets only when they occur.
The Consistency Principle. Once you adopt a principle or a method, you continue to use it until a better one exists.
The Full Disclosure Principle. This means that the financial statement of a business and all of the information that may affect financial statements is documented.
The Going Concern Principle. A concept that a business will remain in operation for the foreseeable future, meaning a company is justified in deferring of some expenses, like depreciation, until later.
The Matching Principle. A concept that revenue related expenses are recorded at the same time.
Materiality Principle. The concept that all transactions be recorded to avoid alteration.
Monetary Unit Principle. Businesses must record all transactions in only one unit of currency.
Time Period Principle. A concept that a business reports the results of its operations over a standard period of time.