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12 Cards in this Set

  • Front
  • Back
Economic Entity Assumption
Means that economic activity can be identified with a particular unit of accountability.

A business enterprise can be kept separate and distinct from its owners and any other business unit.
Going Concern Assumption
That the business will have a long life.
Monetary Unit Assumption
Money is the common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis.
Periodicity Assumption
Economic activities of an enterprise can be divided into artificial time periods.
Historical Cost Principle
GAAP requires that most assets and liabilities be accounted for and reported on th ebasis of acquisition price.
Revenue Recognition Principle
Revenue is generally recognizred when realized or realizable and when earned.
Matching Principle
Efforts (expenses) be matched with accomplishment (revenues) whenever it is reasonable and practicable to do so.
Full Disclosure Principle
General Practice of providing information that is of sufficient importance to influence the judgment and decisions of an informed user is followed.
Cost-Benefit Relationship
The costs of providing the information must be weighed against the benefits that can be derived from using the information.
Relates to an item's impact on a firm's overall financial operations. An item is material if its inclusion or omission would influence or change the judgment of a reasonable person.
Industry Practices
The peculiar nature of some industries nad business concerns sometimes requires departure from basic theory.
When in doubt choose the solution that will least likely overstate assets and income.