Term
|
Definition
| Every buisness must be accounted for separately and distinctively from its owner. |
|
|
Term
|
Definition
| Information in financial statements must be supported by evidence other than someone's imagination or opinion. |
|
|
Term
|
Definition
| Financial Statements should present information based on costs incurred in a transaction. |
|
|
Term
|
Definition
| Prepare financial statements under the assumption that the business will continue operating instead of being put up for sale or closed. |
|
|
Term
|
Definition
| The expression of transactions and events is in money units. |
|
|
Term
|
Definition
| Revenue should be reported when it is earned and not before, the inflow of assets associated with revenue does not have to be in the form of cash, amound of revenue should be measured as the cash recieved plus the cash equivalent of any noncash assets recieved in exchange for goods or services. |
|
|
Term
|
Definition
| Assumes that a business's activities can be divided into specific time periods such as motnhs, quarters or years. |
|
|
Term
|
Definition
| Expenses must be reported in the same accounting period as the revenues that were earned as a result of the expense. |
|
|
Term
|
Definition
| A company m ust use the same accounting methods period after period so that financial statements of succeeding periods are comparable. |
|
|
Term
|
Definition
| Select the less optimistic estimate when two estimates of amounts to be received or paid are about equally likely. |
|
|
Term
|
Definition
| An accounting principle can be ignored if the effect on the financial statements is unimportant to their users. |
|
|
Term
|
Definition
| Financial statements including footnotes must contain all the relevant information about the operations and financial position of the entity, it must be presented in an understandable manner. |
|
|
