Accounting Flash Cards chapter 2 homework
Accounts Payable
current Liabilities
Accounts receivable
current Assets
Accumulated Depreciation
Property, plant, equipment
Buildings
property,plant, equipment
cash
current Assets
Goodwill
Intangible Assets
income tax payable
current liability
investment in long term boards
long-term investments
land
property, plant, equipment
inventory
current assets
patent
intangible assets
supplies
current assets
Items not easily quantified in dollar terms are not reported in the financial statements
Monetary Unit Assumption
Accounting information must be complete, neutral, and free from error
Faithful Representation
Personal Transactions are not mixed with the company’s transactions
Economic Entity Assumption
The cost to provide information should be weighed against the benefit that users will gain from having the information available
Cost constraint
The company’s use of the same accounting principles from year to year
consistency
Assets are recorded and reported at original purchase price
Historical cost principle
Accounting information should help users predict future events, and should confirm or correct prior expectations
Relevance
The life of a business can be divided into artificial segments of time
Periodicity Assumption
The reporting of all information that wold make a difference to financial statement users
Full disclosure principle
The judgement concerning whether and items size makes it likely to influence a decision maker
Materiality
Assumes a business will remain in operation for the foreseeable future
Going concern Assumption
Different companies use the same accounting principles
comparability
