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Parson - Accounting Concepts

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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  
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If something is important the information is deemed relative & should be included in financial reports.   Materiality  
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means the information “makes a difference” to a user in reaching a business decision.   Relevant  
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Information must be free from significant error and free from bias... Users of accounting data assume that the data are reliable.   Reliable  
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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  
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This concepts is applied when financial statements contain all information necessary to understand a business’s financial condition.   Adequate Disclosure (Full Disclosure  
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Revenue from business activities and expenses associated with earning that revenue are recorded in the same accounting period.   Revenue or Matching Principle  
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Changes in financial information are reported for a specific period of time in the form of financial information.   Accounting Period Cycle  
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The same accounting procedures are followed in the same way in each accounting period.   Consistent Reporting  
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This principle is applied when a source document is prepared for each transaction.   Objective Evidence  
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Revenue is recorded at the time goods or services are sold.   Realization of Revenue  
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Financial statements are prepared with the expectation that a business will remain in operation indefinitely.   Going Concern  
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Financial information is recorded and reported separately from the owner’s personal financial information.   Business Entity  
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Business transaction are stated in numbers that have common values; that is, using a common unit of measurement.   Unit of Measurement  
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Created by: yparson
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