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8 Cards in this Set
- Front
- Back
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Business entity concept |
Accounting for a business or organization is kept separate from personal affairs |
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Continuing concern concept |
Assumes that a business will continue to operate unless known otherwise |
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Principle of conservatism |
Accounting for a business should be fair and reasonable. Results shouldn't overstate or understate the affairs of a business |
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Objectivity principle |
Accounting will be recorded on objective evidence, different people looking at the evidence will arrive at the same value for the transaction. This is called a source document, |
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Revenue Recognition Concept |
Revenue is recorded when it is earned, not necessarily when cash changes hands |
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Matching expense principle |
Costs that generate revenue, must be recorded in the same accounting period as the revenue that they generated, not necessarily when they are paid for |
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Time period Concept |
Accounting takes place over specific time periods known as fiscal periods. The fiscal periods should be of equal length when used to measure the financial progress of the business |
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Cost principle |
Items are recorded in the books at historical cost paid by the purchaser, and do not change from their original value |
