If you fully adhere to these accounting principles, you shall record and your business accounting transactions like a Pro. This is almost the same thing as the revenue recognition principle only that this time, it has to do with your assets and liabilities you should only record assets and liabilities when youвЂ™re sure that transactions would occur and not while speculating. You cannot use the double entry system today and adopt the single entry system of bookkeeping tomorrow your methods have to be consistent. You need to be consistent with the accounting methods you adopt. You can only record transactions you can place a monetary value on. The accounting reports should be prepared to cover a standard period that may be a year, month or week. This means you should only record transactions when there has been an exchange of value. You are not to record business income based on speculations or promises you should only record transactions that have occurred. This helps show a true picture of what happened during each accounting period. You should always record your business transactions as soon as they occur whether you receive or make payments for them now or plan to do so in the future. If youвЂ™re using accrual accounting system for every debit entry you make, you must make a corresponding credit entry and vice versa. Your account should contain all relevant information that would help readers fully understand it. You should prepare your accounts with the assumption that your business would continue to exist for a very long time. In simpler terms, your business should appear a separate individual and any monies, assets or resources belonging to your business donвЂ™t necessarily belong to you. This principle means your business should appear separate from its owner. Understanding the Basic Principles of Accounting Revenue principle Expense principle Matching principle Cost principle Objectivity principle Continuity. I suggest going through these topics in order because many of them. Each section has many examples of real business transactions and even sample ledgers and financial statements to help you understand the concepts. Some essential principles guide the preparation of accounts, and when youвЂ™re adding your bookkeeping entries, you should ensure you adhere to these following principles: 1. I designed this basic accounting course to give you an understanding of the basic accounting principles, transactions, and operations.

Basic accounting for beginners