Three meanings come to mind when you ask about principles of accounting…
- 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. (Today, the title of the introductory accounting course and its related textbook will likely be Financial Accounting.)
- 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.
- Principles of accounting can also refer to the U.S. generally accepted accounting principles (US GAAP or GAAP). In this context, principles of accounting includes both the underlying basic accounting principles and the official accounting rules issued by the Financial Accounting Standards Board (FASB). These official detailed rules or standards are organized in the FASB’s Accounting Standards Codification (ASC).
