| Question |
Answer |
| is to take the safe route. In reporting the financial position of a business, the conservatism principle states that it is best to present amounts that are least likely to result in an overstatement of income or assets. |
Conservatism |
| If something is important the information is deemed relative & should be included in financial reports. |
Materiality |
| means the information “makes a difference” to a user in reaching a business decision. |
Relevant |
| Information must be free from significant error and free from bias... Users of accounting data assume that the data are reliable. |
Reliable |
| information can be compared from year to year, and from business to business. The same type of statements, therefore are prepared at the end of each period. |
Comparable |
| This concepts is applied when financial statements contain all information necessary to understand a business’s financial condition. |
Adequate Disclosure (Full Disclosure |
| Revenue from business activities and expenses associated with earning that revenue are recorded in the same accounting period. |
Revenue or Matching Principle |
| Changes in financial information are reported for a specific period of time in the form of financial information. |
Accounting Period Cycle |
| The same accounting procedures are followed in the same way in each accounting period. |
Consistent Reporting |
| This principle is applied when a source document is prepared for each transaction. |
Objective Evidence |
| Revenue is recorded at the time goods or services are sold. |
Realization of Revenue |
| Financial statements are prepared with the expectation that a business will remain in operation indefinitely. |
Going Concern |
| Financial information is recorded and reported separately from the owner’s personal financial information. |
Business Entity |
| Business transaction are stated in numbers that have common values; that is, using a common unit of measurement. |
Unit of Measurement |
Beef Production
