1. 10 Accounting Concepts n Accounting Period Cycle-Changes in financial information are reported for a specific period of time in the form of financial statements. n Adequate Disclosure-Financial statements contain all information necessary to understand a business’financial condition.

2. Concepts n Business Entity-Financial information is recorded and reported separately from the owner’s personal financial information. n Consistent Reporting-The same accounting procedures are followed in the same way in each accounting period. n Going Concern-Financial statements are prepared with the expectation that a business will remain in operation indefinitely.

3. Examples of Concepts n Using Straight-Line Depreciation methods. n Purchase of a Delivery Truck for a business. n A financial statement that includes all necessary information.

4. Concepts n Historical Cost-the actual amount paid for merchandise or other items bought is recorded. n Matching Expenses with Revenue-Revenue from business activities and expenses associates with earning that revenue are recorded in the same accounting period.

5. Concepts n Objective Evidence-A source document is prepared for each transaction. n Realization of Revenue-Revenue is recorded at the time goods or services are sold. n Unit of Measurement-Business transactions are state in number that have common values, that is, using a common unit of measurement.

6. Examples of Concepts n John received at receipt showing proof of the transaction. n The transaction amount recorded was $75.85. n The transaction on June 21 was recorded as having taken place in the Month of June.

7. Accounting Concepts n Do you comprehend the Accounting Concepts which supply the basis for Accounting Practices?