GAAP: Generally Accepted Accounting Principles

Basically accounting principles were made to implement all the guidelines and act in accordance with the rules, then for it along with the principle of technological advances must be made in accordance with the rules. Financial accounting is based on the guidelines that have been tested so as to generally accepted accounting science is the science of the principles that are in accounting is not an exact science. Accounting principles to be formulated by a competent body.
Here will be given some explanation of the principles of accounting
1. Business entity concept, this concept is an entity separate from each other, that there is a clear dividing line. for example, the finance department should not be mixed with other parts.
2. Going Concern, this concept assumes an economic entity will continue its business and will not be dissolved, unless there is evidence to the contrary.
3. Using the Recording Monetary unit: all transactions that occur will be revealed in the record in the form of monetary unit at the time of the transaction. Monetary unit used is the currency of the country in which they stand. Example: Australian Dollar from the Australian monetary unit, and so on.
4. Objectivity principle, in this case arbitrarily created data should be trusted as a report that presents the right information and useful.
5. Time Period, the restrictions on time to be able to assess and report on the results of the business carried on. This is because the company is considered to continue to live in the future, so it is not possible to know if the profits or losses of the business we have to wait for the company closed first.
6. Historical Cost This principle sets the value to be reported in the financial statements. There are several ways that can be used in reporting the value in the financial statements include: Book Value, Present Value, Replacement Value, Market Value.
7. Consistency, according to this principle, the company is required to implement procedures and accounting methods of the same (consistent) from one period to the next.
8. Full Disclousure, in presenting the data or financial information of a company should be complete and there should not be concealed.
9. Material (Materiality): basically compiled based on basic accounting theory applied to the transactions that occur in a certain way. However, in practice not all transactions are treated in accordance with the theory.
10. Conservative (Konservatism): in principle, the financial statements are prepared in such a way with a lowered assessment. This is due to the cautious attitude of the management is reflected in the financial statements to anticipate the circumstances at the time were not obtained profit or loss.
11. Accrual Basic: to achieve its objectives, the financial statements prepared on the accrual basis. Thus, transactions and other events are recognized when they occur, not when cash or cash equivalents received or paid. Then, the transactions recorded in the accounting records and reported in the financial statements for the same period.