Misc. definitions

Question 1

Define the period assumption

Answer 1

The assuption that reports are prepared for a particular period of time, in order to obtain comparability of results

Question 2

Define Verifiablility

Answer 2

Financial information should allow different knowledgeable and independent observers to reach a consensus that an event is faithfully represented

Question 3

Define Comparability

Answer 3

Financial information should be able to be evaluated against similar information about the same entity from another period

Question 4

Define Owner’s Equity

Answer 4

The residual interest in the assets of an entity after the deduction of its liabilities