Term
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Definition
| All revenue earned must be recognized or recorded. |
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Term
Reliability principle (aka objectivity principle)
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Definition
| The most reliable economic data available, preference for information that is verifiable. |
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Term
Cost principle (or historical cost)
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Definition
| Recording acquired assets and services at their actual cost. |
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Term
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Definition
| Assumes that the entity will remain in business for the foreseeable future and will remain in operation long enough to use existing resources for their intended purpose. |
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Term
| Stable monetary unit concept |
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Definition
| Assumes that the dollars purchasing power is stable. |
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Term
| Revenue Recognition Principle |
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Definition
| Revenues should be recognized in the period when you've earned them, not when you're paid for them. |
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Term
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Definition
| Revenue earned by a business must match all the expenses incurred to generate that revenue. Transactions must be adjusted to record the % of the transaction that was completed within a period. |
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