**Key Accounting Principles (in Easy Language):**
1. **Going Concern Principle:** Imagine a company will keep running for a long time. This way, they can correctly show what they own and owe.
2. **Revenue Recognition Principle:** Money should be counted when a company earns it, not just when they get it. It's like getting paid for work when it's done, not when you receive the paycheck.
3. **Matching Principle:** Costs should be counted in the same period as the money they help make. It's like saying the money spent on making a product should be counted when the product is sold.
4. **Conservatism Principle:** When things are uncertain, it's better to say you have less money than to say you have more. This helps avoid being overly optimistic in financial reports.
5. **Consistency Principle:** If you choose a way to count money, stick with it so everyone can understand the reports over time.
6. **Materiality Principle:** Only big or important things should be shown in the reports. Small stuff that doesn't matter much can be left out.
7. **Cost Principle (Historical Cost):** Write down how much something cost when you bought it, not how much it's worth now. This keeps things fair and easy to check.
8. **Full Disclosure Principle:** Tell people everything they need to know in the reports, even if it's not great news.
9. **Objectivity Principle:** Use facts, not opinions, when making reports. Keep it real and reliable.
10. **Time Period Principle:** Split the financial year into smaller parts to make reporting and tracking money easier.
11. **Entity Principle:** Keep business money separate from personal money. Don't mix them up.
12. **Consolidation Principle:** If a big company has smaller companies under it, add up all their money stuff in one big report to see the whole picture.
These principles help make sure financial reports are clear, honest, and helpful for making decisions. They're like rules for telling the money story of a business.
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