Part I General Accepted accounting Principles (GAAP) These are set of accounting principles, standards and procedures used by companies to compile financial statements. They are basically a combination of boards’ policies and the commonly accepted ways of recording and reporting accounting information. With GAAP accountants are held accountable (Financial Accounting Standards Board 1981). Double Entry Accounting This is a method of record keeping that enables one to record the movement of money from and where it is going to. In this case money is never gained nor lost. Double entry principle dictates that a transaction is only complete when there are two parties involved that is, there must be a source account and a destination account. Historical Cost This is a measure of value that dictates the price of an asset depicted on the balance sheet, must be based on the original cost that that asset was acquired at by the company