Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
13 Cards in this Set
- Front
- Back
|
accounting entity theory |
accounting entity theory requires that the activities of a business are separate from the actions of the owner. all transactions are recorded from the point of view of the business. |
|
|
accounting period theory |
accounting period theory divides the life of a business into regular time intervals. |
|
|
accrual basis of accounting theory |
accrual basis of accounting theory requires that the recording of all business activities which have occured, regardless of whether cash is paid or received in that accounting period. |
|
|
matching theory |
matching theory states that the expenses incurred in a given point must be matched against income earned to determine the profit and loss for that period. |
|
|
consistency theory |
consistency theory requires an entity to use the same accounting methods and procedures across periods to enable meaningful comparison over time. |
|
|
going concern theory |
going concern theory states that a business entity is assumed to operate indefinitely unless there are signs that it has to stop operating. |
|
|
historical cost theory |
historical cost theory requires that transactions be recorded at their original cost. |
|
|
monetary theory |
monetary theory states that only transactions which can be measured in monetary terms are to be recorded. |
|
|
materiality theory |
materiality theory requires that relevant information should be reported in the financial statements if it is likely to make a difference to the decision-making process. |
|
|
objectivity theory |
objectivity theory requires that accounting information recorded must be supported by reliable and verifiable evidence so that financial statements will be free from opinions and biases. |
|
|
prudence theory |
prudence theory requires that the accounting treatment chosen should be one that least overstates profits and least understates liabilities and losses. |
|
|
prudence theory |
prudence theory requires that the accounting treatment chosen should be one that least overstates profits and least understates liabilities and losses. |
|
|
revenue recognition |
revenue recognition theory states that revenue is earned when goods have been delivered or services have been provided. |
