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a firm buys a piece of land for $400,000 in the year 1992. In the year 2002 , the market price for the land is now $1,000,000 but the firm still keeps the base price of the land at $400,000 because it was bought at that price at that specific time.

Another accounting concept would be the money measurement concept. The monetary principle is defined as a record of an event or transaction that is taking place which is measured in terms of money. For example, in Malaysia transactions are stated in RM ( Ringgit Malaysia ) and foreign money like USD, SGD, Sterling pounds and Yen will be converted to RM in order for financial statements to be done.

The business entity concept is the basic concept of accounting which differentiates the business and its owner. In other words, personal transactions will not affect the business. An example, when the owner buys a car for personal use, the money used to purchase the car will not be deducted from the company's account.

The time interval concept is known to be a financial period. Thus, financial statements or reports are done within the period of one year. Financial statements can also be prepared in a time frame of 6months, 3 months and so on. For example, an investor wants to know the progress of a company , thus reports will be made annually for the investor.

Lastly, the going concern assumption is known to be a useful information which consist of calculations of assets and profits. Accountants usually use the going concern principle to assume that the business will continue operating for years to come. For example, investors would only invest in a business after interpreting the financial statements prepared while assuming that the company will continue operating for the foreseeable future.
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