| Term | Definition |
|---|
| Accounting period cycle | changes in financial information are reported for a specific peiod of time in the form of financial statements |
| Adequate disclosure | financial statements contain all information necessary to understand a business's financial condition |
| Business entity | financial information is recorded and reported seperately from the owner's personal financial information |
| Consistent Reporting | the same accounting procedures are followed in the same way in each accounting period |
| Going Concern | Financail statments are prepared with the ecpectation that a bussiness will remain in operation indefinitely |
| Historical cost | the actual amount paid for merchandise or other items bought is recorded |
| Matching Expenses with Revenue | Revenue from business activities and expenses associated with earning that revenue are recorded in the same accounting period |
| Objective Evidence | A source document is prepared for each transaction |
| Realization of Revenue | Revenue is recorded at the time goods or services are sold |
| Unit of Measurement | Business transactions are stated in numbers that have common values; that is, using a common unit of measurement |
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