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ACCOUNTING CONCEPTS (Going Concern (Financial statements are prepared with…
ACCOUNTING CONCEPTS
Going Concern
Financial statements are prepared with the expectation that a business will remain in operation indefinitely
Accounting Period Cycle
Changes in financial information are reported for a specific period of time in the form of financial statements.
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Adequate Disclosure
Financial statements should contain all information necessary for a reader to understand a business’ financial condition.
Consistent Reporting
In the preparation of financial statements, the same accounting concepts are applied in the same way in each accounting period.
Prudence
Revenues and profits are only included in the accounts when they are realized or their realization is reasonably certain.
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Business Entity
A business’ financial information is recorded and reported separately from the owner’s personal financial information..