Generally Accepted Accounting Principles

Time Period

All financial records are prepared over the same length of time.

Monetary Unit

All transactions in accounting records are recorded using the Canadian dollar if the business is a Canadian business.

Consistency

All transactions of the same type are recorded in the accounting books in the same manner.

Materiality

Also known as Cost-Benefit Constraint, an amount may be ignored if its affect on the financial statements is not important to the users of those financial statements.

Objectivity

Every transaction recorded in the accounting records is supported by the appropriate documentation.

Conservatism

Inventory reported at market value even when the market value is lower than the cost.

Business Entity

Keeping personal and business records separate

Revenue Recognition

Revenue is recorded when goods or services are sold.

Matching

Revenues are recorded within the same financial period as the expenses involved in the generation of that revenue.

Cost

The actual price paid for an item is recorded in the accounting records.

Going Concern

The assumption, in accounting, that a business will last forever.

Full Disclosure

The financial records contain all the information necessary to understand a business' financial condition.