Accounting for IGCSE & O level - Advanced Principles (Section 7 - No. 41)
What is the difference between the accruals concept and the historic cost concept?
The accruals concept recognizes revenues and expenses in the accounting period to which they relate, while the historic cost concept records assets at their original cost.
The accruals concept is a form of historic cost.
The historic cost concept is used in conjunction with the accruals concept.
The historic cost concept recognizes revenues and expenses in the accounting period to which they relate, while the accruals concept records assets at their original cost.
Explicação
The accruals concept dictates that revenues and expenses are recognized when earned or incurred, not when cash changes hands. The historic cost concept relates to the valuation of assets.