| A | B |
|---|
| Accounting | Central focus is decision-making |
| Financial Reports | Classified summaries of an enterprise's financial standing |
| Profit and Loss Statement | Declares the profit (loss) made by an enterprise for a given period of time |
| Balance Sheet | Shows the financial position of an enterprise at a stated point in time |
| Accounting Standards | Practices and procedures with which members of accounting professional bodies must comply |
| Accounting Entity Assumption | Presumes that a business enterprise (entity) has an existence separate from the private affairs of the owner |
| Accounting Period Assumption | Divides the life of the enterprise into arbitrary time periods |
| Matching Principle | Items are recorded in the period to which they relate |
| Monetary Assumption | Assumes that all transactions can be recorded in money terms |
| Legal Entity | Refers to the owner/s being reponsible for the actions and debts of the business |
| Historical Cost Assumption | Refers ot the recording of items at their original purchase price |
| Continuity (Going Concern) Assumption | Assumes that entity will continue to operate in the foreseeable future |
| Assumptions | Concepts, rules or regulations that are set standards on which all other decision-making is based |
| Qualitativer Characteristics | Attributes financial information should possess if it is to be included in financial reports |
| Relevance | Applying to the matter in hand |
| Reliability | To depend confidently on something |
| Materiality | Importance of an item to the particular entity |
| Comparability | Desirable to compare aspects of an entity over time |
| Understandability | Information should be presented in the most understandable manner possible without sacrificing relevance or reliability |
| Factors affecting the development of Accounting | Legal factors, ethical conduct, economic factors, technological trends and demand for diversity of accounting services |
