Micro Accounting

Micro Accounting
See also

Micro Accounting is deals with the creation of financial reports that are important information for managers, owners, regulators and other stakeholders[1]. Micro accounting covers enterprises and is the opposite to macro accounting. According to Syed Sajid:, Accounting is often called the language of business through which normally a business house communicates with the outside world”[2].

Accounting Principles

Accounting is based on standards that are called accounting principles. These principles fall into two categories[3]:

  • Accounting Concept these are the basic principles on the basis of which the financial statement is prepared.
  1. Business Entity Concept/ Separate Entity Concept
  2. Going Concern Concept
  3. Accounting Concern Period
  4. Money Measurement Concept
  5. Cost Concept
  6. Dual Aspect Concept
  7. Matching Concept or Periodic Matching of Cost or Revenue Concept
  8. Realization Concept
  • Accounting Conventions this term means generally accepted traditions or customs that guide the accountant when preparing the financial statement.
  1. Consistency
  2. Conservatism
  3. Materiality
  4. Disclosure

Macro and Micro Accounting theory

In the second half of the 20th century in Japan, there was a fear of integrating macro accounting with micro accounting. Kurosawa believed that for accounting to be part of economics sciences a combination of macro and micro accounting must occur. To connect both areas of Bray and Richard Stone they proposed a special system of accounts[4].

Combining macro and micro via a standardized chart of accounts was considered, however, a conceptual problem is emerging. Business and domestic accounting is sometimes similar in terminology but different in concept. Both systems worked on a different concept. In micro accounting, the transaction is recorded twice because it affects various balance sheet items, and in macro accounting, that is in domestic accounting, double-entry affects economic entities[5].

Another difference is the use of historical cost models, this is very common in business accounting and has never been used in national accounting. In macro accounting, it is more important to obtain positive value and achieve a result, and in micro accounting, it is more important to sell and profit[6].

According to Stephen P. Walker:, On a global level, value added represents the value created by an economic system. At the level of an individual entity, such as a company, it shows the value created by that company exclusive of its consumption of items created by other economic entities”[7].



  1. Sajid S.(2010)
  2. Sajid S.(2010)
  3. Sajid S.(2010)
  4. Mattessich R.(2007)
  5. Walker S.P.(2009)
  6. Walker S.P(2009)
  7. Walker S.P(2009)

Author: Oliwia Kamińska