Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Chapter 1-2
Elements and Principles
| Term | Definition |
|---|---|
| Entity Principle | the business is assumed to be separate from the owner and other businesses, and its records should be kept on this basis. |
| Going Concern Principle | the life of the business is assumed to be continuous, and its records are kept on that basis. |
| Reporting Period Principle | the life of the business must be divided into periods of time to allow reports to be prepared; these accounting reports should reflect the Reporting Period in which a transaction occurs. |
| Historical Cost Principle | the recording of a transaction at its original cost or value, as this value is verifiable by reference to the source document |
| Conservatism Principle | losses should be recorded when probable but gains should only be recorded when certain, so that liabilities and expenses are not understated and assets and revenues are not overstated |
| Consistency Principle | accounting methods should be applied in a consistent manner to ensure that reports are comparable between periods |
| Monetary unit Principle | all items must be recorded and reported in a common unit of measurement; that is, Australian dollars |
| Relevance | accounting reports should include all information that is useful for decision-making |
| Reliability | accounting reports should contain information that is accurate, and free from bias or error |
| Comparability | accounting reports should be able to be compared over time |
| Understandability | accounting reports should be presented in a manner that makes it easy for them to be understood by the user |
Created by:
callielee
Popular Accounting sets