Costprinciple

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Unformatted text preview: t Principle Financial statements are based on actual costs incurred in business transactions Going­Concern Principle A business continues operating instead of being closed or sold. Monetary Unit Principle Express transactions and events in monetary units. Revenue Recognition Principle Business Entity Principle Revenue is recognized when earned Proceeds from selling need not be in cash Revenue is measured by cash plus the value A business is accounted for separately from its owner or owners Forms of Business Ownership Forms of Organization Business Sally’s Grocery Law Offices Proprietorship Partnership Corporation Forms of Organization Nonbusiness Government Nonprofit Private Characteristics of Business Organizations Organizations Characteristics Proprietorship Partnership Corporation Business entity yes yes yes Legal entity no no yes Limited liability no no* yes Unlimited life no no yes Business taxed no no yes One owner allowed yes no yes **Limited partnerships and limited liability partnerships Limited partnerships and limited liability partnerships specifically res...
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