What is Drawings in Accounting Term

Drawings. An owner may withdraw cash or other assets for personal use. We use
a separate classifi cation called drawings to determine the total withdrawals for each
accounting period. Drawings decrease owner’s equity. They are recorded in a
category called owner’s drawings

What is COST PRINCIPLE

COST PRINCIPLE

The cost principle (or historical cost principle) dictates that companies record assets
at their cost. This is true not only at the time the asset is purchased, but also
over the time the asset is held. For example if Best Buy purchases land for $300,000,
the company initially reports it in its accounting records at $300,000. But what
does Best Buy do if, by the end of the next year, the fair value of the land has increased
to RS 500,000? Under the cost principle, it continues to report the land at
$400,000

What is Generally Accepted Accounting Principles - GAAP

The accounting profession has developed standards that are generally accepted
and universally practiced. This common set of standards is called generally accepted
accounting principles (GAAP).