Term
| Business Entity Principle |
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Definition
| An accounting principle that requires that a business maintain its own set of records and accounts that are separate from other financial interests of its owners. |
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Term
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Definition
An accounting principle that requires accounting procedues that recognize expenses as soon as possible, but delay that recognition of revenues until they are ensured.
Example, nonrefundable deposits for future services should be recognized as liabilities until the service is actually perfomed. |
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Term
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Definition
| An accounting principle that requires that once an accounting method has been adopted, it should be followed from period to period in the future unless a change in accounting methods is warranted and disclosed. |
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Term
| continuity of the business unit principle |
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Definition
| The assumption in preparing the accounting records and reports that the business will continue indefinitely and that liquidation is not a prospect-in other words, that the business is a going concern. |
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Definition
| An accounting principle that requires recording the value of transactions for accounting purposes at the actual transaction price (cost) |
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Term
| Full disclosure principle |
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Definition
| An accounting principle that requires that a business's financial statements provide information on all the significant facts that have a bearing on their interpretation. Types of disclousers include the accounting method used, changes in the accounting methods, contingentliabilities, events occuring subsequent to the financial statement date, and unusual and nonrecurring items. |
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Term
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Definition
| An accounting principle that requires the preparation of accounting records and reports under the assumption that the business will continue indefinitely and that liquidation is not a prospect |
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Definition
| An accounting principle that requires that expenses and revenues be matched to the period in which they were incurred or earned regardless of when they are actually realized |
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Definition
An accounting principle that states that only items that are 'material' or that 'make a difference' should be presented in financial statements.
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Term
| Objective evidence principle |
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Definition
| An accounting priciple that states that all accounting transactions and the resulting accounting records should be based on objectively determined evidence to the greatest extent possible |
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Term
| Unit of Measurement principle |
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Definition
| The accounting principle that requires financial datat to be recorded with a common unit of measure. In the United States that common unit is the dollar. |
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