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37 Cards in this Set
- Front
- Back
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Matching Principle |
Record expenses in the period related revenue is in |
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Periodicity |
The life of an enterprise can be divided into artificial time periods |
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Historical Cost Principle |
The original transaction value upon acquisition |
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Materiality |
Concerns the relative size of an item and its effect on decisions |
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Realization Principle |
Criteria usually satisfied at point of sale |
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Going concern assumption |
The entity will continue indefinitely |
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Monetary Unit Assumption |
A common denominator is the dollar |
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Economic Entity Assumpion |
The enterprise is seperate from its owners and other entities |
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Full-Disclosure principle |
All information that could affect future decisions must be disclosed |
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Predictive Value |
Information is useful in predicing the future
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Relevance |
Pertinent to the decision at hand |
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Timeliness |
Information is available prior to the decision
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Distribution to owners |
Decreases in equity resulting from transfers to owners |
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Confirmatory Value |
Information confirms expectations |
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Understandability |
Users understand the information in the context of the decision being made |
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Gain |
Results in an asset is sold for more than its book value |
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Faithful representation |
agreement between a measure and the phenomenon it purports to represent |
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Comprehensive Income |
The change in equity from nonowner transactions |
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Comparability |
Important for making interim comparisions |
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Neutrality |
The absense of bias |
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Recognition |
the process of admitting information into financial statements |
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Consistency |
applying the same accounting practices over time |
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Cost effectiveness |
Requires consideration of the costs and value of information |
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Verifiability |
Implies consensus amoung different measurers. I |
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Intanglible assets are usually reported in the balance sheet as current assets |
FALSE (LONGTERM)
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Liability |
Obligation to tranfer cash or other resources as a result of a past transactions
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Distribution to Owners |
Dividends paid by a corporation to its shareholders |
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Revenue |
Inflow of an asset from providing a good or service |
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Assets, Liabilities, and Equity |
The financial position of a company |
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Comprehensive Income |
Increase in equity during a period from nonowner transactions |
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Gain |
Increase in equity from peripherial or indicidental transactions |
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LOss |
Sale of an asset used in the operations of a business for less than the asset's book value.
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Equity |
The owner's residual interest in the assets of a company
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Asset |
An item owned by the company representing probable future benefits |
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Net Income |
Revenues plus gains less expenses and losses
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Investments by Owner |
An owner's contribution of cash to a corporation for ownership shares of stock
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Expense |
Outflow of an asset related to the production of revenue. |
