Accounting Concepts, Conventions & Double Entry

Entity, Going Concern, Accrual, Matching, Conservatism, Materiality, Journal, Ledger, and Trial Balance.

Target: EPFO APFC 2026•Topic-Level RAG Context Active•Model: Nemotron 3.5 Lightning 30B / 120B

Topic Overview

Entity, Going Concern, Accrual, Matching, Conservatism, Materiality, Journal, Ledger, and Trial Balance.

Business Entity Concept vs Going Concern Concept
Accrual Basis vs Cash Basis of Accounting
Matching Principle (matching revenue earned with expenses incurred in same accounting period)
Prudence / Conservatism Principle (anticipate no profit, provide for all possible losses)
Golden Rules of Accounting: Personal (Debit receiver, Credit giver), Real (Debit what comes in, Credit what goes out), Nominal (Debit expenses/losses, Credit incomes/gains)

💡 Conservatism principle dictates valuing stock at Cost or Net Realizable Value (NRV), whichever is LOWER.
💡 Trial Balance verifies arithmetical accuracy of ledger posting but does NOT prove absence of errors (e.g. error of principle).

3 Matched PYQs

2025•EPFO APFC•General Ability Test• Q.97

Which one of the following is not a 'fundamental accounting assumption' in the preparation of financial statements?

2025•EPFO APFC•General Ability Test• Q.99

When purchase of an asset is treated as an expense, in the accounting context, it is called :

2025•EPFO APFC•General Ability Test• Q.100

In accounting context, which one of the following statements is correct?

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