| A | B |
|---|
| Economic Entity Assumption | identify economic events associated w/particular business entity |
| Going Concern Assumption | entity to operate indefinitely; not worry about cost in long-term |
| Time Period Assumption | divide the future life of the entity into artificial time periods |
| Monetary Unit Assumption | Transactions stated in terms of U$S included in acctg system |
| Cost Prinicple | exchange sales to value assets and liabilities |
| Realization Principle | recognize rev. when earnings process=complete/collection assured |
| Matching Principle | recognize associated exp. in period rev. reported |
| Full Disclosure Principle | disclose info useful to those using financial stmts |
| Cost effectiveness Constraint | costs of providing info; where benefits > costs |
| Materiality Constraint | make difference in making decision |
| Conservatism Constraint | Choose the acctg method least likely to overstate A or Income/understate L |
| Financing Activities | start bus. = need funds; borrow from others; sell shares of stock |
| Investing Activities | Buying/selling physical/financial A x firm |
| Operating Activities | Selling products/svcs; primary activities |
| Basic Accounting Equation | A = L + S/E |
| Income Statement Elements | Revenues; Expenses; Gains; Losses |
