Consistancy - When a buisness adopts accounting policies, it should conitnue these policies consistantly. If a business decided to depreciate an asset for 10% each year using the straight line method, they should continue to use that percentage and method for future accounts for the asset.
Prudence - also known as conservatism. In the final accounts, where there is any doubt a conservative (lower) figure should always be reported for profit and the valuation of assets. It prevents an over optimistic presentation of a business through the final acoounts.
Realisation - Business transactions are recorded in the final accounts when the legal ownership passes between buyer and seller. It not be at the time as payment is made
Objectivity - The presentation of final accounts should be objective ratehr than subjective and is not influenced by the opinions of the owner or accountant. It is supported by business documents.
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