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9 Cards in this Set
- Front
- Back
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Objective Evidence
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Each transaction is described by a business document that provies the transaction did occur.
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Historical cost
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The actual amount paid or received is the amount recorded
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Realization of Revenue
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Revenue from business transactions is recorded at the time goods or services are sold.
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Matchining expenses with Revenue
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Revenue from business ativities and expenses associated with earning that revenue are recorded in the same accounting period.
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Adequate Disclosure
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Financial statements should contain all information encessary for a reader to understand the financial condition of a business.
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Materiality
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States that strict adherence to any accounting principle is not required when it is relatively difficult to do and the lack of adherence does not materially affect the reporting of net income.
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Conservation
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Holds that accountants should be conservative in their estimates and opinions and in the selection of procedures, choosing those that neither unduley understand nor overstate the situation.
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Consistency
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Requires a constant application by a company of any selected accountng method of procedures, accounting period after accounting period.
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Business Entity
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The financial information of a business is recorded and reported separately from the owner or owner's personal financial affairs.
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