Know the Accounting Basics that Power Business Success

A Good Start for Aspiring People Interested in Bookkeeping and Accounting

If you are a student or a small business owner managing financial matters, having a basic knowledge of accounting is absolutely necessary. All accounting activities rely on these principles to guarantee that financial data is both accurately and honestly stated.

At NBBT College, our Practical Accounting course is based on these main goals which help you gain the necessary skills to do well in your career.

We will take a look at what these main accounting principles mean and why they are important.

What Makes Accounting Principles So Important?

Accounting is the tool that businesses use to communicate. To provide consistent, accurate and open financial reports, accountants and bookkeepers in Canada use the Generally Accepted Accounting Principles (GAAP).

Understanding these principles helps you:

• 📊 Maintain accurate financial records
• 📁 Develop reports that can be relied on by stakeholders
• 📅 Stay compliant with CRA regulations
• 💼 Make informed business and financial decisions

7 Fundamental Principles of Accounting

Following are the core principles that every aspiring accounting professional should know and learn:

1. The Principal of Recognizing Revenue: Revenue is recorded when it is earned, not when the payment is received.

Example: If you complete a service in December and the client pays the following January, the revenue is still recorded as December’s.

2. Matching Principle: When you record expenses, they should be included in the same time period that they helped to earn your revenue.

Example: If work is finished in the last month of the year (December) and the payment is settled in the first month (January), the expense should be linked with December’s revenue.

3. Cost Principle: Assets should be recorded using the amount you paid for them at the time of acquiring them, not by what they’re worth today.

Example: If the office equipment you purchased is worth $2,000, that’s the value you record in for now, no matter if its value changes later.

4. Objectivity Principle: Every record of financial information ought to be backed by objective evidence such as receipts, invoices or contracts.

Example: A transaction is supported by documentation, not just by a person’s estimate or their opinion.

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5. Full Disclosure Principle: All important financial details must be revealed in the financial statements or in the footnotes.

Example: A company must share information about a pending lawsuit, regardless of the uncertain outcome.

6. Going Concern Principle: Treats the business as if it will carry on forever, unless there is reason to think otherwise.

Example: You shouldn’t assume the company will close next year unless there is official plan or announcement about it.

7. Consistency Principle: Once you choose your accounting method, always use it the same way from time to time for consistency and comparability.

Example: If you use straight-line depreciation this year, you should keep using it next year unless you have good reasons to do something else.

How These Principles Apply in Real Life

We teach you here at NBBT College not only the theory but also how to use them in:

• 📘 QuickBooks and Sage entries
• 📁 Financial statement preparation
• 🧾 Payroll and HST remittance
• 📊 Budgeting and forecasting
• ✅ CRA-compliant bookkeeping practices

You will solve real-world problems and work with case studies to see how businesses use these principles everyday.

Why Should You Learn This at NBBT College?

Our Practical Accounting program is created for:

• Students hoping to learn skills that are valuable for their future jobs
• People from abroad looking to join the Canadian workforce quickly
• Professionals interested in changing their line of work or learning new skills
• Entrepreneurs who want to manage their own books

Experienced instructors, industry-relevant curriculum, and flexible schedules allow NBBT College to help you succeed as an accountant or financial professional.

Final Thoughts

Accounting principles are important because they guide and sustain honest, precise and proper financial management. Understanding these ideas is the first part of developing a successful career in accounting, bookkeeping or business finance.

Regardless of whether you’re just getting into education or trying to advance your career, NBBT College can help you.

Want to expand your knowledge? Check out our Practical Accounting Program at NBBT College or speak to an advisor for more information on enrollment.