What is Prudence Concept in Accounting?

According to the principle of expense recognition, any expense should not be recognized until any related revenue is also recognized. The prudence concept recommends recognising contingent liabilities when there is a reasonable possibility of occurrence. This ensures...

Accounting and financial statements

The expanded accounting equation shows the relationship between your balance sheet and income statement. Revenue and owner contributions are the two primary sources that create equity. If your business has more than one owner, you split your equity among all the...