Term
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Definition
| The long life of a company can be reported over a series of shorter time periods. |
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Term
| Continuity Assumption (Going Concern) |
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Definition
| Entity will not go out of business in the near future. |
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Term
| Separate Entity Assumption |
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Definition
| Activities of a business are separate from activities of the owners. |
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Term
| Unit of Measure Assumption |
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Definition
| Accounting Measurements will be in the national monetary unit. |
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Term
| Historical Cost Principle |
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Definition
| Cash equivalent price on the transaction date is used initially to measure elements. |
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Term
| Revenue Recognition Principle |
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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). |
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Term
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Definition
| Record when expenses are incurred to generate revenues. |
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Term
| Full Disclosure Principle |
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Definition
| Provide information sufficiently important to influence a decision (e.g., notes) |
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Term
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Definition
| Benefits to users should outweigh costs of providing information. |
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Term
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Definition
| Relatively small amounts not likely to influence decisions are to be recorded in the most cost-beneficial way. |
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Term
| Industry Practices Constraint |
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Definition
| Industry-specific measurements and reporting deviations may be acceptable. |
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Term
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Definition
| Exercise care not to overstate assets and revenues or understate liabilities and expenses. |
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