Basic Accounting Principles Flashcards are a helpful study tool designed to assist in learning the fundamental concepts of accounting. These flashcards typically contain key terms, definitions, and examples to reinforce understanding of accounting principles.
Accounting is the process of recording, summarizing, analyzing, and reporting financial transactions. It is essential for businesses to accurately track their financial activities to make informed decisions. Basic Accounting Principles establish the foundation for understanding how financial information is recorded and reported.
Learn Basic Accounting Principles With Flashcards
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quick facts
- Accounting principles are the rules and guidelines that companies must follow when preparing financial statements.
- These principles ensure that financial information is presented accurately and consistently across different companies.
- The main accounting principles include the historical cost principle, revenue recognition principle, matching principle, and full disclosure principle.
card list
| Front | Back |
|---|---|
| Entity principle | The Entity principle is the idea that a business is separate from its owner and should be treated as its own entity. |
| Going concern principle | The going concern principle means a business is expected to continue operating in the future. |
| Monetary unit principle | Monetary unit principle: The principle that financial information should be recorded in a common monetary unit, such as dollars. |
| Historical cost principle | The Historical cost principle is the accounting concept that assets should be recorded at the amount paid to acquire them. |
| Revenue recognition principle | The revenue recognition principle is a rule that states revenue should be recorded when it is earned, regardless of when the cash is received. |
| Matching principle | Matching principle: Matching expenses to the revenues they generate. |
| Materiality principle | Materiality principle: Information that could impact a decision or judgment should be disclosed. |
| Consistency principle | Consistency principle: Always acting in the same way, following through with what you say or believe. |
| Conservatism principle | Conservatism principle: An accounting principle that states that assets and liabilities should be recorded at their original cost. |
| Full disclosure principle | Full disclosure principle: Requiring all relevant information be provided in financial statements. |