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ACCOUNTING CONCEPTS (CONCEPT Objective Evidence (Business document, proves…
ACCOUNTING CONCEPTS
CONCEPT Objective Evidence
Business document
proves that transaction did occur
checks are prepared for cash payments
receipts are for cash receipt
sales are for items sold
CONCEPT Consistent Reporting
same accounting period
for making financial decisions
info from one year compade to similar info for the previous year
changes in accounting methods aren`t made
CONCEPT Business Entity
information is reported and recorded
individual's financial records shoudn't include personal info
records should not be mixed
CONCEPT Accounting Period Cycle
FS are summarized periodically and reported to business owners
for a period of time
month,six month, year
CONCEPT Unit of Measurement
recording in a common unit - the dollar
some info in Swiss francs
in Ukraine finansial info is recorded in Hrivnas
CONCEPT Materiality
subjective exercise
the assessment of an item may affect its treatment in the accounts
some types of expenditure are less important than others
CONCEPT Going Consern
FS are prepared if a business will remain in operation indefinitely
notes are prepared as though business will continue
CONCEPT Matching Expenses with Revenue
recorded in the same accounting period
Finansial statement
how much earned
how much it cost
CONCEPT Adequate Disclosure
info must be necessary for a reader
info must be reported for business decisions
CONCEPT Prudence
revenues\ profits included in the accounts when they are realized
Concept: gives the most cautious presentation on the businesss`s position