Accounting principles are the basic rules and guidelines used to prepare and present financial statements.

They ensure that financial information is:

Reliable

Consistent

Comparable

Common accounting principles include:

Accrual Principle – Record income and expenses when they are earned or incurred.

Matching Principle – Match expenses with the related income.

Consistency Principle – Use the same methods each year.

Prudence Principle – Do not overstate income or assets.

In simple terms, accounting principles are the fundamental rules that guide the preparation of accounts.