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11 terms

Accounting Concepts

These are the accounting concepts
STUDY
PLAY
Accounting Period Cycle
changes in financial information are reported for a specific period 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 separately 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
Financial statements are prepared with the expectation that a business 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
Materiality
Business activities creating dollar amounts large enough to affect business decisions should be recorded and reported at separate items in accounting items in accounting records and financial statements.
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.