ACCT DEFINTIONS

ACCT DEFINTIONS - Accounting assumptions and principles: H...

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Unformatted text preview: Accounting assumptions and principles: H istorical Cost- The historical cost principle requires that the original cost of a resource, not its current market value or replacement cost, be used as the basis to account for the resources of an entity. Consistency- Consistency is conformity from one period to another in the use of accounting methods and procedures. Entity- The entity assumption is the basis for the distinction made by the accountant between a business and its ownership. Matching- related to the measurement of the earnings or income of an entity. It provides that expense that can be associated with revenue should be matched with that revenue when the revenue is earned during a particular period. Time period- financial payments are prepared for such time intervals as a year or a quarter. Revenue recognition- Revenue from sales usually is recognized at the time that both an exchange transaction takes place and the earnings process is complete or virtually complete....
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ACCT DEFINTIONS - Accounting assumptions and principles: H...

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