FUNDAMENTALS OF ABM 1

• Accounting Principles


  The rules and guidelines that companies and other bodies must follow when reporting financial data
• Accounting Principles


  • Accrual principle
  • Conservatism
  • Consistency principle
  • Cost principle
  • Economic entity
  • Full disclosure
  • Matching principle
  • Going concern principle
  • Materiality principle
  • Monetary unit principle
  • Reliability principle
  • Revenue recognition
  • Time period principle
• Accrual Principle


  Accounting events should be recorded when they occur, regardless of cash transactions
• Conservatism


  Caution when recording transactions; delay recording if uncertain
• Cost Principle


  Assets and expenses should be recorded at original cost, not current market value
• Consistency Principle


  Accounting policies and procedures should remain consistent over time
• Economic Entity


  A business is separate from its owners; record financial transactions independently
• Matching Principle


  Match expenses with the revenues they help generate
• Going Concern Principle


  Assume a business will continue to operate in the future
• Full Disclosure


  Include all relevant financial information in financial statements
• Monetary Unit Principle


  Express all financial transactions in a common currency
• Materiality Principle


  Only significant and relevant transactions should be recorded and reported
• Reliability Principle


  Ensure financial statements are accurate, complete, and consistent
• Revenue Recognition


  Rules for recognizing revenue, such as when revenue can be recorded and how to account for it