Accounting Principles and Assumptions
2023
Specific Accounting Principle - answer Usually created by a pronouncement from an
authoritative body
Going-Concern Assumption - answer Financial statements reflect the assumption that the
business continues operating
General Accounting Principle - answer Derived from long-used and generally accepted
accounting practices.
Business Entity Assumption - answer Every business is accounted for separately from its owner
or owners
Revenue Recognition Principle - answer Revenue is recorded only when the earnings process is
complete.
Cost Principle - answer Information is based on actual costs incurred in transactions.
Matching Principle AKA Expense Recgonition Principle - answer A company records the
expenses incurred to generate the revenues reported
Full Disclosure Principle - answer A company reports details behind financial statements that
would impact users' decisions.
Time Period Assumption - answer Presumes that the life of a company can be divided into time
periods such as months and years and that useful reports can be prepared for those periods.
2023
Specific Accounting Principle - answer Usually created by a pronouncement from an
authoritative body
Going-Concern Assumption - answer Financial statements reflect the assumption that the
business continues operating
General Accounting Principle - answer Derived from long-used and generally accepted
accounting practices.
Business Entity Assumption - answer Every business is accounted for separately from its owner
or owners
Revenue Recognition Principle - answer Revenue is recorded only when the earnings process is
complete.
Cost Principle - answer Information is based on actual costs incurred in transactions.
Matching Principle AKA Expense Recgonition Principle - answer A company records the
expenses incurred to generate the revenues reported
Full Disclosure Principle - answer A company reports details behind financial statements that
would impact users' decisions.
Time Period Assumption - answer Presumes that the life of a company can be divided into time
periods such as months and years and that useful reports can be prepared for those periods.
