GAAP Principles Flashcards
1
Q
Cost Principle
A
Assets should be reported at their historical (original) cost
2
Q
Going-Concern Principle
A
The assumption that a business will continue forever
3
Q
Objectivity Principle
A
What’s recorded on the financial statements must be true & verifiable
4
Q
Stable-Dollar Assumption
A
The value of the monetary unit isn’t always stable
5
Q
Adequate Disclosure
A
Users of financial info are informed of all info necessary for proper interpretation of the financial statements
6
Q
Matching Principle
A
The concept of offsetting expenses against revenue on basis of cause & effect
7
Q
Realization Principle
A
Revenue should be recognized when goods are sold or services are redeemed
