| A | B |
|---|
| Entity Concept | The financial affairs of the owner must be kept separate from those of the business. |
| Going Concern | The business is assumed to continue operating into the foreseeable future. |
| Monetary Measurement | All items are stated in dollar value so we can compare their worth. |
| Period Reporting | The life of a business is divided into periods of equal length. |
| Accrual Basis | The effects of transactions are recognised when they occur and reported in the financial statements of the periods to which they relate. |
| Assets | Service potential or future economic benefits controlled by the entity as a result of past transactions. |
| Historical Cost Concept | All transactions are recorded at the price paid or payable at the time of the transaction. |
| Liabilities | Future sacrifices of service potential or economic benefits that the entity is obliged to make to other entities as a result of past transactions. |
| Owner's Equity | The residual interest in the assets of the entity after deduction of its liabilities. Assets minus liabilities. |
| Revenue | Increases in assets or decreases in liabilities which do not relate to increased contributions by owners. |
| Expenses | Decreases in assets or increases in liabilities which do not relate to distributions to owners. |
