Economics

KeyAccountingPrinciplesandTerms2.docx

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Account for Business, Making Sense of the Mess

Key Accounting Principles and Terms

As you read through the Project resources for this Project, use this document to record the definitions of essential accounting principles, terms and concepts.

Note: the terms “principles” and “assumptions” are often used synonymously throughout the Project resources.

Accounting Principles and Concepts

· Purpose of Accounting Principles:

· Accruals Principle:

· Going Concern Principle:

· Time Period Principle:

· Historical Cost Principle:

· Accounting Entity Principle:

· Full Disclosure Principle:

· Matching Principle:

· Monetary Unit Principle:

· Realization Principle:

· Conservatism Concept:

· Consistency Concept:

· Materiality Concept:

· Neutrality Concept:

Key Terms

Income Statement Definition:

· Key elements of an income statement:

Balance Sheet Definition:

· Key elements of a balance sheet:

Statement of Cash Flows Definition:

· Key elements of a statement of cash flows:

Types of Business Ownership

· Sole Proprietorship:

· Partnership:

· Corporation: