Second: Money Measurement Principle
According to this principle,
only the transactions that can be expressed in monetary terms
are allowed to be recorded in the balance sheet or the income and loss statement of a company.
And the recording of the financial data has to occur in one currency only.
For instance: dollar, euro or yen.
Third: Matching Principle.
This principle requires that all revenues and expenses
are recorded when a transaction occurs
rather than when payment is received or made.
In accounting terms, this is the so called accrual principle.
Forth: Consistency Principle.
This principle demands that once a business has decided on an accounting methodology
it needs to follow it consistently in future accounting periods
so that the results reported from period to period are comparable.
Fifth: Accounting Year Principle.
Here, every organization chooses a time period to complete its accounting cycle.
Which can be a fiscal year or a calendar year.
And lastly, the sixth principle: Profit Realization Principle.
According to this principle,
profit is only recognized once it is earned.
Generally, profit realization occurs when goods are sold
or a service is delivered.