front 1 Period | back 1 Financial activities are recorded and reported on for a particular period of time |
front 2 Accrual Basis | back 2 Recording revenue when earned, and expenses when incurred |
front 3 Going Concern | back 3 A business will continue to operate, and isn’t expected to end in the near future |
front 4 Entity | back 4 Business must keep its records separate from its owner |
front 5 Timeliness | back 5 Information is to be provided to users as quickly as possible so that it remains useful for decision making |
front 6 Under-standability | back 6 Financial information should be presented clearly and concisely, so that users can easily understand it |
front 7 Relevance | back 7 Information to be useful in helping users make decisions |
front 8 Faithful Representation | back 8 Financial information must accurately reflect economic events |
front 9 Comparability | back 9 Ability to compare similar types of accounting information effectively with other entities, or over different reporting periods |
front 10 Verifiability | back 10 Information is to be supported by evidence that can be used to check its accuracy |
front 11 Asset | back 11 A present economic resource controlled by the entity as a result of past events e.g cash at bank, inventory, vehicle, accounts receivable |
front 12 Liabilities | back 12 A present obligation of the entity to transfer an economic resource as a result of past events e.g loan, accounts payable |
front 13 Revenue | back 13 Increases in assets or decreases in liabilities that result in increases in owner’s equity, other than those relating to contributions from the owner e.g cash sales, credit sales |
front 14 Expense | back 14 Decreases in assets or increases in liabilities that result in a decrease in owner’s equity, other than those relating to distributions to the owner e.g wages, rent, electricity, advertising |
front 15 Owner’s Equity | back 15 The residual interest in the assets of the entity after deducting all its liabilities e.g capital, drawings, capital contributions |