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14 Cards in this Set
- Front
- Back
Separate entity
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transactions of the business are separate from the ones of the owners
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Going Concern
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aka continuity- business will operate into the future, or assumed to have an indefinite life
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time period
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the indefinite life of a business must be reported over a series of shorter time periods.
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Relevant
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Predictive value- being able to go into the future
Feedback value- prior expectations Timeliness- must be able to make an impact on decisions |
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Reliable
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repeatable
verifiable- can be verified independently faithfullness neutral- unbiased |
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Comparable
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Microsoft vs. yahoo
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Consistent
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Microsoft 2007 vs Microsoft 2008
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Historical cost principal
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whatever you buy the item for, that is how it is recorded
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Materiality
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significant amounts resulting from the error or omission can mislead knowledgeable readers. ex:buying a office furniture would not be an expense for GE
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Cost Benefit
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the cost of doing it has to outweigh gathering it
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Conservatism
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do not overstate assets and revenues, and do not understate liabilities, SE, and expenses
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Working Capital
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CA-CL
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Current Ratio
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CA/CL
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Financial leverage ratio
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measure of credit risk. low is good
ATA/ATSE |