What is principles of accounting?

Three meanings come to mind when you ask about principles of accounting...

  1. Principles of accounting was often the title of the introductory course in accounting. It was also common for the textbook used in the course to be entitled Principles of Accounting.
  2. Principles of accounting can also refer to the basic or fundamental principles of accounting: cost principle, matching principle, full disclosure principle, revenue recognition principle, going concern assumption, economic entity assumption, and so on. In this context, principles of accounting refers to the broad underlying concepts which guide accountants when preparing financial statements.
  3. Principles of accounting can also mean generally accepted accounting principles (GAAP). In this context, principles of accounting includes both the underlying basic accounting principles and the official accounting pronouncements issued by the Financial Accounting Standards Board (FASB). These official pronouncements are the detailed rules or standards for specific topics.

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