Term
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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 |
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Term
| Economic Entitiy Assumption |
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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 |
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Term
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Definition
| economic life of a business can be divided up into artificial time pds. Months, qtrs, years for reportings |
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Term
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Definition
| the business will continue in operation long enough to carry out its existing objectives |
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Term
| revenue recognization principal |
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Definition
| rev should be regocnized in the acc pd in which it was earned. |
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Term
| Percentage of completion method |
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Definition
current pd costs / total estimated costs = % complete
% complete x total revs = revenues recognized for current period |
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Term
| Gross Profit Recognized for current pd |
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Definition
| revs recog - costs incurred = gpr |
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Term
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Definition
| cash collections from customer X gross profit % = gross profit recognized during the pd |
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Term
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Definition
| expenses be matched with revenues in the pd which efforts are made to generate revenues. |
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Term
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Definition
| assets be recorded at their cost |
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Term
| full disclosure principle |
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Definition
| circumstances and events taht make a diff to financial statement users be disclosed. |
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Term
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Definition
| relates to an items impact on a firm's overall financial condition and operations |
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Term
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Definition
| when in doubt, choose the method that will be least likely to overstate assets and income. BUT do not understate assets/income either. |
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