Basic Accounting Principles
This refers to the amount of spent when an item was originally obtained.
COST PRINCIPLE
This shows the changes and the results of additional investment, withdrawals, plus or minus the net income or net loss for the year.
STATEMENT OF CHANGES IN OWNERS EQUITY OR STATEMENT OF OWNERS EQUITY
Supplies bought for use in the businesses or services and benefits to be received by the business.
PREPAID EXPENSES
a liability to pay the bank or other financing institutions arising from funds borrowed by the business.
LOAN PAYABLE
Economic activities that are measurable in monetary and non-monetary value.
BUSINESS TRANSACTIONS
This should have its corresponding expenses recorded, in order to show the true profit of the business.
MATCHING PRINCIPLE
This shows the result of operations for a given period.
STATEMENT OF FINANCIAL POSITION OR BALANCE SHEET
The purchase price of the particular line of goods the business expects to sell to its customers for cash or on a charge account basis.
MERCHANDISE INVENTORY
Obligation to pay companies for services received from them.
UTILITIES PAYABLE
The amount of account receivable that is estimated to be uncollectible.
DOUBTFUL ACCOUNTS EXPENSE
The information should be disclosed within the statement or in the notes to the statement.
FULL DISCLOSURE PRINCIPLE
This summarizes the cash receipts and cash disbursements for the accounting period.
STATEMENT OF CASHFLOWS
This also known as marketable securities.
INVESTMENT IN TRADING SECURITIES
Includes debts arising from purchase of an asset.
ACCOUNTS PAYABLE
Give Two Classification of Revenues
OPERATING REVENUE AND NON-OPERATING REVENUE
This principle allows an accountant to violate another accounting principle if an amount is insignificant.
MATERIALITY PRINCIPLE
It consists of revenue, cost, and expenses.
STATEMENT OF COMPREHENSIVE INCOME OR INCOME STATEMENT
The amount collectible from the customer to whom sales have been made or services have been rendered on account or credit.
ACCOUNT RECEIVABLES
Payable within 12 months or shorter.
LOAN PAYABLE
GIVE THE TWO FORMS OF FINANCIAL POSITION
ACCOUNT FORM AND REPORT FORM
This entails that bookkeeping and financial recording be performed with independence, that is free of bias and prejudice.
OBJECTIVITY PRINCIPLE
It consists of the assets, liabilities, and capital.
STATEMENT OF FINANCIAL POSITION OR BALANCE SHEET
This represents the expired cost of property, plant, and equipment as a result of usage and passage of time.
ACCUMULATED DEPRECIATION
Represent obligations of the business arising from advance payments received before goods or services are provided to the customer.
UNEARNED REVENUES
GIVE THE ACCOUNTING EQUATION
ASSETS = LIABILITIES + OWNER'S EQUITY