Details Title: Accounting Assumptions and Description: Principles and Constraints Total Flash Cards: 12 Created: 12/11/2008 18:18:01		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Accounting Flashcards
Cards in this set: Term Time Period Assumption Definition The long life of a company can be reported over a series of shorter time periods. Term Continuity Assumption (Going Concern) Definition Entity will not go out of business in the near future. Term Separate Entity Assumption Definition Activities of a business are separate from activities of the owners. Term Unit of Measure Assumption Definition Accounting Measurements will be in the national monetary unit. Term Historical Cost Principle Definition Cash equivalent price on the transaction date is used initially to measure elements. Term Revenue Recognition Principle Definition Record when measurable, realizable, and earned(i.e., company performs, evidence of customer payment arrangement exists, price is determinable, and collection is reasonably assured). Term Matching Principle Definition Record when expenses are incurred to generate revenues. Term Full Disclosure Principle Definition Provide information sufficiently important to influence a decision (e.g., notes) Term Cost Benefit Constraint Definition Benefits to users should outweigh costs of providing information. Term Materiality Constraint Definition Relatively small amounts not likely to influence decisions are to be recorded in the most cost-beneficial way. Term Industry Practices Constraint Definition Industry-specific measurements and reporting deviations may be acceptable. Term Conservatism Constraint Definition Exercise care not to overstate assets and revenues or understate liabilities and expenses.