Home > Flashcards > Accounting > chapter 12 GAAP principals

Details Title: chapter 12 GAAP principals Description: GAAP principals Total Flash Cards: 13 Created: 04/03/2006 13:48:29	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term Monetary Unit Assumption Definition states only the transacion data that can be expressed in terms of $$ be included in the accounting records. ie: value of the ceo is not included b/c it can't be calculated Term Economic Entitiy Assumption Definition activities of the entity be kept seperate and distinct from the activities of the owner and of all other economic entities. ie: IBM can b distinguished from Apple or Dell Term Time Pd. Assumption Definition economic life of a business can be divided up into artificial time pds. Months, qtrs, years for reportings Term going concern assumption Definition the business will continue in operation long enough to carry out its existing objectives Term revenue recognization principal Definition rev should be regocnized in the acc pd in which it was earned. Term Percentage of completion method Definition current pd costs / total estimated costs = % complete % complete x total revs = revenues recognized for current period Term Gross Profit Recognized for current pd Definition revs recog - costs incurred = gpr Term installment method Definition cash collections from customer X gross profit % = gross profit recognized during the pd Term Matching Principle Definition expenses be matched with revenues in the pd which efforts are made to generate revenues. Term cost principle Definition assets be recorded at their cost Term full disclosure principle Definition circumstances and events taht make a diff to financial statement users be disclosed. Term Materialality Definition relates to an items impact on a firm's overall financial condition and operations Term conservatism Definition when in doubt, choose the method that will be least likely to overstate assets and income. BUT do not understate assets/income either.