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Accounting Principle
The accounting principles
Term | Definition |
---|---|
Entity | The business is assumed to be separate from the owner and other businesses, and its records should be kept on this basis. |
Going Concern | The life of a business is assumed to be continuous, and its records are kept on this basis. |
Reporting Period | The life of the business must be divided into periods of time to allow reports to be prepared. |
Historical Cost | The recording of a transaction at its original cost or value. |
Conservatism | Losses should be recorded when probable but gains should only be recorded when certain. |
Consistency | Accounting methods should be applied in a consistent manner to ensure that reports are comparable between periods |
Monetary Unit | All items must be recorded and reported in a common unit of measurement |