Accounting Principles and Assumptions 2023.

Specific Accounting Principle Usually created by a pronouncement from an authoritative body Going-Concern Assumption Financial statements reflect the assumption that the business continues operating General Accounting Principle Derived from long-used and generally accepted accounting practices. Business Entity Assumption Every business is accounted for separately from its owner or owners Revenue Recognition Principle Revenue is recorded only when the earnings process is complete. Cost Principle Information is based on actual costs incurred in transactions. Matching Principle AKA Expense Recgonition Principle A company records the expenses incurred to generate the revenues reported Full Disclosure Principle A company reports details behind financial statements that would impact users' decisions. Time Period Assumption 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. Monetary Unit Assumption We can express transaction events in monetary, or money, units.