Accounting Concept Notation
Accounting period concept P
Adequate disclosure concept D
Business entity concept B
Cost concept C
Going concern concept G
Matching concept M
Objectivity concept O
Unit of measure concept U
1. Assume that a business will continue forever.
2. Material litigation involving the corporation is described in a note.
3. Monthly utilities costs are reported as expenses along with the monthly revenues.
4. Personal transactions of owners are kept separate from the business.
5. This concept supports relying on an independent actuary (statistician), rather than the chief operating officer of the corporation, to estimate a pension liability.
6. Changes in the use of accounting methods from one period to the next are described in the notes to the financial statements.
7. Land worth $800,000 is reported at its original purchase price of $220,000.
8. This concept justifies recording only transactions that are expressed in dollars.
9. If this concept was ignored, the confidence of users in the financial statements could not be maintained.
10. The changes in financial condition are reported at the end of the month.