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9 Cards in this Set
- Front
- Back
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Reliability
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refers to measurements that are unbiased and subject to verification by independant experts. Examples of objective evidence include invoices, contracts, paid checks, etc. In other words, information must be verifiable and neutral
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Cost Principle
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assets are initially recorded in the accouts at cost. Assets are determind through arm-lengths bargaining
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Revenue Recognition Principle
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revenues are recognized in the accounting period in which earned
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Matching Principle
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expenses incurred are matched with revenues earned by incurring those expenses.
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Full Disclosure Principle
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means that all material and relevant facts concerning financial position nd the results of operations are communicated to users
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Time Period Assumptions
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Accountants are asked to measure operating progress and changes in economic position at relatively short time intervals during the indefinite life. Evidenced by the preparation of financial statements.
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Monetary Unit Assumption
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Means that money is used as the basic measuring unit for financial reporting. Implicit in the use of money as a measuring unit is the assumption that the dollar is a stable unit of value.
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Going Concern Assumption
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business will continue in operation for a period of time sufficent to carry out its exisiting commitments. If not used, then plant assets are incorrectly recorded at fair value instead of cost.
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Business Entity Assumption
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means that a business is accounted for seperately from other business entities including its owner.
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