100% CORRECT WELL DETAILED
Relevance - ANSWER The quality of information that indicates the information makes
a difference in a decision.
Reliability - ANSWER the quality of information that gives assurance that it is free of
error and bias
Comparability - ANSWER Ability to compare the accounting information of different
companies because they use the same accounting principles.
Consistency - ANSWER use of the same accounting principles and methods from year
to year within a company
Monetary Unit Assumption - ANSWER Only items that be expressed in money are
included in the accounting records
Economic Entity Assumption - ANSWER every economic entity can be separately
identified and accounted for
Time Period - ANSWER The life of a business is divided into meaningful time periods
for financial reporting
Going Concern Assumption - ANSWER Entity will continue to operate long enough to
recover the cost of its assets
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, Revenue Recognition Principle - ANSWER a revenue should be recorded when a
resource has been earned
Matching - ANSWER Expenses are matched with related values in the same accounting
period
Cost Principle - ANSWER A principle that states that acquired assets and services
should be recorded at their actual cost.
Full Disclosure Principle - ANSWER A company reports details behind financial
statements that would impact users' decisions.
Materiality Constraint - ANSWER Whether an item was large enough to likely influence
the decision of investor or creditor
Cost-Benefit constraint - ANSWER only information with benefits of disclosures greater
than the costs of providing it need be disclosed
Conservatism Principle - ANSWER the approach of choosing an accounting method
that will least likely overstate assets and net income
Basic Financial Statements - ANSWER income statement, balance sheet, cash flow
statement
Assets - ANSWER resources owned by a business
current assets - ANSWER items that can or will be converted into cash within one year
Long-term investments - ANSWER are generally
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Relevance - ANSWER The quality of information that indicates the information makes
a difference in a decision.
Reliability - ANSWER the quality of information that gives assurance that it is free of
error and bias
Comparability - ANSWER Ability to compare the accounting information of different
companies because they use the same accounting principles.
Consistency - ANSWER use of the same accounting principles and methods from year
to year within a company
Monetary Unit Assumption - ANSWER Only items that be expressed in money are
included in the accounting records
Economic Entity Assumption - ANSWER every economic entity can be separately
identified and accounted for
Time Period - ANSWER The life of a business is divided into meaningful time periods
for financial reporting
Going Concern Assumption - ANSWER Entity will continue to operate long enough to
recover the cost of its assets
1
, Revenue Recognition Principle - ANSWER a revenue should be recorded when a
resource has been earned
Matching - ANSWER Expenses are matched with related values in the same accounting
period
Cost Principle - ANSWER A principle that states that acquired assets and services
should be recorded at their actual cost.
Full Disclosure Principle - ANSWER A company reports details behind financial
statements that would impact users' decisions.
Materiality Constraint - ANSWER Whether an item was large enough to likely influence
the decision of investor or creditor
Cost-Benefit constraint - ANSWER only information with benefits of disclosures greater
than the costs of providing it need be disclosed
Conservatism Principle - ANSWER the approach of choosing an accounting method
that will least likely overstate assets and net income
Basic Financial Statements - ANSWER income statement, balance sheet, cash flow
statement
Assets - ANSWER resources owned by a business
current assets - ANSWER items that can or will be converted into cash within one year
Long-term investments - ANSWER are generally
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