Accounting Principles and Reporting Standards FLASHCARDS

Historical cost principle The principle that requires assets to be recorded at their cost at the time they are acquired Historical cost principle

Periodicity of income assumption The concept that income should be reported in certain time periods Periodicity of income assumption

Qualitative characteristics Traits necessary for credible financial statements: usefulness, relevance, reliability, verifiability, neutrality, understandability, timeliness, comparability, and completeness Qualitative characteristics

Recognition The determination of the period in which to record a business transaction Recognition

Separate entity assumption The concept that a business is separate from its owners; the concept of keeping a firm's financial records separate from the owner's personal financial records Separate entity assumption

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