Accounting Principles exam questions with 100% correct answers.

Compatibility Principle Information system principle that prescribes an accounting system to conform with a company's activities, personnel, and structure. Conservatism Constraint Principle that prescribes the less optimistic estimate when two estimates are about equally likely. Consistency Concept Principle that prescribes use of the same accounting methods over time so that financial statements are comparable across periods. Control Principle Information system principle that prescribes an accounting system to aid managers in controlling and monitoring business activities. Cost-benefit Principle Information system principle that prescribes the benefits from an activity in an accounting system to outweigh the costs of that activity. Cost-benefit Constraint The notion that the benefit of a disclosure exceeds the cost of the disclosure. Cost Principle Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions. Flexibility Principle Information system principle that prescribes an accounting system be able to adapt to changes in the company, its operations, and needs of decision makers. Full Disclosure Principle Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition. Going-concern Assumption Principle that prescribes financial statements to reflect the assumption that the business will continue operating.