Term
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Definition
| An entity is required to use the same accounting principles and methods year after year, so that financial statements of succeeding periods will be comparable. Changes may be made infrequently, with full disclosure. |
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Term
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Definition
| Losses should be recognized immediately, gains should be recognized according to the revenue recognition principle. |
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Term
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Definition
| Goods and services purchased are recorded at cost. |
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Term
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Definition
| Financial statements, including the footnotes should report all relevant information in relation to reporting using GAAP. |
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Term
| Business Entity Principle |
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Definition
| A business is a virtual being. The accounting for a business is separate from the accounting for any other business or for the owners. |
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Term
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Definition
| Financial statements are prepared under the assumption that the business will continue in operation. |
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Term
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Definition
| Expenses are to be reported in the same period as the revenues that were earned as a result of those expenses. |
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Term
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Definition
| GAAP requirements may be ignored when a transaction would not influence a reasonable financial statement user. |
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Term
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Definition
| Financial transactions should be recorded based on sufficient competent evidential matter. |
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Term
| Revenue Recognition Principle |
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Definition
| Revenue is to be recorded in the period in which goods are sold, and title has passed, or services have been performed for customers. |
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Term
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Definition
| An entity's activities are identified with the time period of a year. The twelve month period called a fiscal year is used to report to stockholders, to the SEC and the IRS. |
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