An asset is recorded in the books on the basis of the historical cost, that is, the acquisition cost. It records the cost of asset at the time of its purchase.

Dual aspect principle: It is the basis for Double Entry, system of book-keeping. All business transactions recorded in accounts have two aspects receiving benefit and giving benefit. For example, when a business acquires an asset it must pay cash.
Here, the asset is one aspect (receiving benefit) and the cash is another aspect (giving benefit).

Modifying principles: To make the accounting information more useful to various interested parties, the basic assumptions and concepts are modified. The modifying principles are:
(i) Cost benefit principle: This modifying principle states that the cost of applying a principle should not be more than the benefit derived from it. If the cost is more than the benefit, then that principle should be modified.
(ii) Materiality principle: The materiality principle requires all relatively relevant Information should be disclosed in the financial statements. In keeping with this principle, unimportant and immaterial items are either left out or merged with other items.

1. Money measurement concept.
2. Going concern concept.
3. Matching concept.
4. Realisation concept
5. Accrual concept.

No, Every business man does not need accounting knowledge. The business man is called sole trader. If he has little accounting knowledge, is enough, but he should have business skill.

It is a policy of caution or playing safe. While recording the business transactions one has to anticipate no income but provide for all possible losses. For example, stock is valued at cost price or realisable price which ever is less.

According to this concept, every transaction or event has two aspects i.e dual effect. This concept recognises that for every debit, there is a corresponding and equal credit. This is the basis of the entire system of double entry book-keeping.

The concept of going concern assumes that a business firm would continue to carry out its operations indefinitely. Due to this concept distinction is made between capital and revenue expenditure and thus, assets and liabilities are recognised.

Yes, the advice given by the accountant is correct as cash basis of accounting is more appropriate for a doctor as he receives his fee in cash.

(i) The Consistency convention implies that the Accounting practice should remain the same from one year to another.
(ii) The results of different years will be comparable only when same accounting methods are followed from year to year.
(iii) The firm should be modify the method of charging the depreciation from one to another.
(iv) If any change has to be incorporated, valid reasons for such a change should be emphasised.

(i) The accounts must disclose all material information.
(ii) The Accounting reports should disclose full and fair information to the related parties.
(iii) The financial position and performance should be disclosed very honestly to all the users.

(i) Accounting concepts are the basic assumptions or conditions upon which accounting has been laid.
(ii) Accounting concepts are the results of broad consensus.
(iii) The word concept means a notion or abstraction which is generally accepted.
(iv) Accounting concepts provide unifying structure to the accounting process and accounting reports.

According to R.N. Carter defines, "Book keeping is the science and art of recording correctly in the books of account all those business transactions of money or money's worth".