1. Business Entity Concept This concept assumes that, for accounting purposes, the business enterprise and its owners are two separate independent entities. Thus, the business and personal transactions of its owner are separate. For example, when the owner invests money in the business, it is recorded as liability of the business to the owner. Similarly, when the owner takes away from the business cash/goods for his/her personal use, it is not treated as business expense. 2. Money Measurement Concept This concept assumes that all business transactions must be in terms of money. that is in the currency of a country. Thus, as per the money measurement concept, transactions which can be expressed in terms of money are recorded in the books of accounts. 3. Going Concern Concept This concept states that a business firm will continue to carry on its activities for an indefinite period of time. Simply stated, it means that every business entity has continuity of life. Thus, it will not be dissolved in the near future. This Is an important assumption of accounting, as it provides a basis for showing the value of assets in the balance sheet 4. Accounting Period Concept All the transactions are recorded in the books of accounts on the assumption that profits on these transactions are to be ascertained for a specified period. This is known as accounting period concept. Thus, this concept requires that a balance sheet and profit and loss account should be prepared at regular Intervals. This is necessary for different purposes like, calculation of profit, ascertaining financical position, tax computation etc. 5. Dual Aspect Concept Dual aspect is the foundation or basic principle of accounting. It provides the very basis of recording business transactions in the books of accounts. This concept assumes that every transaction has a dual effect, ie. it affects two accounts in their respective opposite sides. Therefore, the transaction should be recorded at two places. It means, both the aspects of the transaction must be recorded in the books of accounts. For example, goods purchased for cash has two aspects which are (1) Giving of cash (i) Receiving of goods. These two aspects are to be recorded.