List and briefly discuss three accounting concepts and princ

List and briefly discuss three accounting concepts and principles that apply to accrual basis accounting.

What will be an ideal response

ANSWER

1. Time period concept — A business’s activities can be sliced into small time segments and financial statements can be prepared for specific periods of time.
2. Revenue recognition principle — Revenue is recorded when it has been earned.
3. Matching principle — Expenses are matched against the revenues of the period. This ensures that all expenses are recorded when they are incurred.