Accounting Principles and Standards
fully solved
Materiality Principle - answer 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 - answer An accounting principle that states that companies should
record assets at their cost.
Matching Principle - answer recognize expenses in the same period as the revenues they help to
generate
Accrual Basis Accounting - answer reporting income when it is earned and expenses when they
are incurred
Conservatism Principle - answer 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 - answer Separates the dealings of a business from the private
dealings of its owners
Going Concern Principle - answer Reflects assumption that the business will continue operating
instead of being closed or sold.
Full Disclosure Principle - answer Accounting principle that dictates that companies disclose
circumstances and events that make a difference to financial statement users.
Consistency Principle - answer A business should use the same accounting methods and
procedures from period to period.
fully solved
Materiality Principle - answer 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 - answer An accounting principle that states that companies should
record assets at their cost.
Matching Principle - answer recognize expenses in the same period as the revenues they help to
generate
Accrual Basis Accounting - answer reporting income when it is earned and expenses when they
are incurred
Conservatism Principle - answer 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 - answer Separates the dealings of a business from the private
dealings of its owners
Going Concern Principle - answer Reflects assumption that the business will continue operating
instead of being closed or sold.
Full Disclosure Principle - answer Accounting principle that dictates that companies disclose
circumstances and events that make a difference to financial statement users.
Consistency Principle - answer A business should use the same accounting methods and
procedures from period to period.
