Accounting principles are the foundation of financial accounting. In the Level 2 Award in Using Computerised Accounting Software in Business Qualification (RQF) course, students are taught the following basic accounting principles:
| Principle | Description |
|---|---|
| 1. Accrual Principle | Revenue and expenses are recorded when they are earned or incurred, not when cash is received or paid. |
| 2. Consistency Principle | Accounting methods and procedures should be consistent from one period to another. |
| 3. Materiality Principle | Only significant items should be recorded in the financial statements. |
| 4. Cost Principle | Assets should be recorded at their original cost, not market value. |
| 5. Going Concern Principle | Assumes that the business will continue to operate indefinitely. |
| 6. Matching Principle | Expenses should be matched with revenues in the period they are incurred. |
| 7. Objectivity Principle | Financial statements should be based on objective evidence. |
These basic accounting principles provide a framework for recording and reporting financial information accurately and consistently. By understanding and applying these principles, students in the Level 2 Award in Using Computerised Accounting Software in Business Qualification (RQF) course can ensure that financial statements are reliable and useful for decision-making.