Accounting Principles
Requires assets to be recorded at cost.
What is the Historical Cost Principle?
An accounting term indicating ongoing business operations.
What is Going Concern?
These are the two accounting constraints.
What are the Materiality Constraint and the Cost-Benefit Constraint?
This is abbreviated to GAAP.
What are Generally Accepted Accounting Principles?
This principle requires a statement for subsequent events.
What is the Full Disclosure Principle?
Commingling of funds violates this assumption.
What is The Business Entity Assumption?
States disclosures are only necessary if the benefits outweigh the costs.
Income is accounted for by the quantity of cash received and value of other assets obtained through sale of goods.
What is the Revenue Recognition Principle?
Quarterly and annual statements are examples of this assumption.
What is The Time Period Assumption?
Although subjective, accountants adhere to rules to determine if this type of person would find information material.
What is a Reasonable Person?
GAAP helps to identify this type of income.
What is Sustainable Income?
This principle requires expenses to be recorded in the same period as related revenues.
What is the Matching Principle?
This assumption requires statements to use a consistent currency in statement presentation
What is The Monetary Assumption?
What is the Materiality Constraint?
Three factors that are the primary purpose and benefit of GAAP.
What is Consistency, Transparency, and Comparability?