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5 Cards in this Set
- Front
- Back
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Accounting conventions
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Rules of thumb, or general principles, for recording transactions and preparing financial statements (LO1)
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Comparability
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The convention of presenting information in a way that enables decision makers to recognize similarities, differences, and trends over different periods in the same company and among different companies (LO2)
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Conservatism
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The convention that when faced with two equally acceptable alternatives, the accountant chooses the one least likely to overstate assets and income (LO2)
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Consistency
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The convention requiring that once a company has adopted an accounting procedure, it must use it from one period to the next unless a note to the financial statements informs users of a change in procedure (LO2)
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Cost-benefit
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The convention that the benefits gained from providing accounting information should be greater than the costs of providing that information (LO2)
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