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accounting-concepts (Going Concern (Financial statements are prepared
…
Going Concern
Financial statements are prepared
with the expectation that a business
will remain in operation indefinitely
Materiality
Some types of expenditure are less important
in a business context than others.
So, absolute precision in the recording
of these transactions is not absolute essential
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Business Entity
A business’ financial information
is recorded and reported separately
from the owner’s personal
financial information
Accounting
Period Cycle
Changes in financial information
are reported for a specific period of time
in the form of financial statements
Prudence
Revenues and profits are only included
in the accounts when they are realized
or their realization is reasonably certain
Consistent Reporting
In the preparation of financial statements,
the same accounting concepts are applied
in the same way in each accounting period
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Adequate
Disclosure
Financial statements should contain
all information necessary for
a reader to understand
a business’ financial condition
Unit of
Measurement
All business transactions are recorded
in a common unit of measurement
— the dollar (in Ukraine - UAN)
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