identifying accounting principles and assumptions

Derived from long used and generally accepted accounting practices

A. General accounting principle

Information is based on actual costs incurred in transactions

B. Cost principle

Every business is accounted for separately from its owners or owner

C. Business entity assumption

Revenue is recorded only when the earnings process is complete

D. Revenue recognition principle

usually created by a pronouncement from an authoritative body

E. Specific accounting principle

A company reports details behind financial statements that would impact users decisions

F. Full disclosure principle

financial statements reflect the assumption that the business generally accepted accounting practices

G. Going-concern assumption

A company records the expenses incurred to generate the revenues reported

H. Matching principle