General accounting concepts: money measurement, duality, cost, going concern, accruals, consistency, prudence, materiality, realisation, business entity
Accountants follow ten agreed rules called accounting concepts. These concepts keep financial records honest, comparable, and useful to anyone reading them.
Real World
Nike's brand value is estimated at over $30 billion, yet it does not appear on their balance sheet — the money measurement concept prevents recording intangible worth that lacks a reliable monetary figure.
Exam Focus
Link each concept to its name explicitly; 'the business should...' without naming the concept scores zero for concept application marks.
Essay Framework
Use PEEL to structure every paragraph. Tap each step for guidance and an example.
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