Generally Accepted Accounting Principles (GAAP)

Certain practices are followed in presenting the accounting information. By general agreement, these practices have been maintained as "principles" or assumptions and are, as said before, designated as GAAP. These principles, or concepts, comprise the following : 

(a)  Money measurement concept; 

(b)  Business entity concept; 

(c)  Going concern concept; 

(d)  Cost concept; 

(e)  Dual aspects; 

(f)  Conservatism; 

(g)  Accrual; 

(h)  Realization; and 

(i)  Consistency. 

It may incidentally be mentioned that (c), (i) and (g) have been regarded as fundamental (accounting) assumptions under International Accounting Standards. These concepts are now discussed in subsequent paragraphs.