Fundamental accounting assumptions are the basic assumptions that accountants use in their work. They are made up of three key concepts: Concern, Consistency, and accrual basis.

Basic accounting concepts used in the business world cover revenues, expenses, assets, and liabilities. These elements are tracked and recorded in documents including balance sheets, income statements, and cash flow statements.

Accounting principles and concepts determine income, expenses, assets and liabilities for financial reporting. Companies implement these principles while preparing financial statements to make them consistent and complete. These properly formulated financial statements help investors in analyzing useful information.