| A | B |
|---|
| business entity | financial information is recorded & reported separately from the owner's personal financial information |
| unit of measurement | business transactions are stated in numbers that have common values |
| going concern | financial statements are prepared with the expectation that a business will remain in operation indefinitely |
| objective evidence | a source document is prepared for each transaction. (checks for cash; memos for the purchase of supplies on account; receipts for investments; tapes for sales) |
| accounting period cycle | Changes in financial information ar reported for a specific period of time in the form of financial statements. |
| adequate disclosure | Financial statements contain all information necessary to understand a business's financial condition |
| consistent reporting | The same accounting procedures are followed in the same way in each accounting period. |
| historical cost | The actual amount paid for merchandise or other items bought is recorded. |
| matching expenses with revenue | Revenue from business activities and expenses associated with earning that revenue are recorded in the same accounting period |
| realization of revenue | Revenue is recorded at the time goods or services are sold. |
