Accounting Principles and Standards fully solved

Materiality Principle An accounting principle that states that only items that are "material" or that "make a difference" should be presented in financial statements Historical cost principle An accounting principle that states that companies should record assets at their cost. Matching Principle recognize expenses in the same period as the revenues they help to generate Accrual Basis Accounting reporting income when it is earned and expenses when they are incurred Conservatism Principle An accounting principle that requires accounting procedures that recognize expenses as soon as possible, but delay the recognition of revenues until they are ensured Economic Entity Principle Separates the dealings of a business from the private dealings of its owners Going Concern Principle Reflects assumption that the business will continue operating instead of being closed or sold. Full Disclosure Principle Accounting principle that dictates that companies disclose circumstances and events that make a difference to financial statement users. Consistency Principle A business should use the same accounting methods and procedures from period to period. Objectivity Principle Means that information is supported by independent, unbiased evidence Enhancing Characteristics Comparability, verifiability, timeliness, and understandability Fundamental Characteristics Relevance and Faithful representation International Accounting Standards Board An accounting standard-setting body that issues standards adopted by many countries outside of the United States.