Term
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Definition
| Use of the same accounting principles and methods from year to year within a company. |
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Term
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Definition
| Constraint of determining whether the cost that companies will incur to provide the information will outweigh the benefit that financial statement users will gain from having the information available. |
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Term
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Definition
| An accounting principle that states that companies should report assets at their costs. |
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Term
| Economic entity assumption |
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Definition
| An assumption that every economic entity can be separately identified and accounted for. |
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Term
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Definition
| Assets and liabilities should be reported at fair value (the price received to sell an asset or settle a liability) |
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Term
| Full Disclosure Principle |
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Definition
| Accounting principle that dictates that companies disclose circumstances and events that make a difference to financial statement users. |
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Term
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Definition
| The assumption that the company will continue in operation in the foreseeable future. |
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Term
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Definition
| The constraint of determining whether an item is large enough to likely influence the decision of an investor or creditor. |
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Term
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Definition
| An assumption that requires that only those tings that can be expressed in money are included in the accounting records. |
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Term
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Definition
| An assumption that the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared for the business. |
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Term
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Definition
| Information that is available to decision makers before it loses its capacity to influence decisions. |
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Term
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Definition
| Is the rational for why plant assets are not reported at liquidation value. |
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Term
| Economic Entity Assumption |
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Definition
| Indicates that personal and business record-keeping should be separately maintained. |
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Term
| Full Disclosure Principle |
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Definition
| Ensures that all relevant financial information is reported. |
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Term
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Definition
| Assumes that the dollar is the "measuring stick" used to report financial performance. |
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Term
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Definition
| Requires that accounting standards be followed for all significant items. |
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Term
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Definition
| Separates financial information into time periods for reporting purpose. |
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Term
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Definition
| Requires recognition of expenses in the same period as related revenues. |
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Term
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Definition
| Indicates that market value changes subsequent to purchase are not recorded in the accounts. |
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