Books of Original Entry
Accounting Concepts
1. Accrual Concepts: revenue and expenses are recorded when they occur and not when the cash is received or paid out.
2. Consistency Concepts: once an accounting method has been chosen, that method should be used unless there is a sound reason to do otherwise.
3. Going concern Concepts: the business entity for which accounts are being prepared is in good condition and will continue to be in business in the foreseeable future.
4. Prudence Concepts: revenue and profits are included in the balance sheet only when they are realized but liabilities are included when there is reasonable 'possibility' of incurring them.
Trial Balance
Trial Balance is ana essential stage in ensuring the accuracy of the book-keeping entries pror to the preparation of the financial statements. The trial balance lists the name of each account together with the balance shown in either the debit or credit coloums. Since every entry in double entry book-keeping should have a corresponding credit enry then, provided no error have occured, the two columns should agree when totalled.
