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Going concern assumption |
Is the rationale for why plant assets are not reported at liquidation value. (Do not use the cost principle.) |
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Economic entity assumption |
Indicates that personal and business record-keeping should be separately maintained. |
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Full disclosure principle |
Ensures that all relevant financial information is reported. |
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Monetary unit assumption |
Assumes that the dollar is the "measuring stick" used to report on financial performance. |
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Materiality |
Requires that accounting standards be followed for all significant items. |
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Time period assumption |
Separates financial information into time periods for reporting purpose. |
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Matching principle |
Requires recognition of expenses in the same period as related revenues. |
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Cost principle |
Indicates that market value changes subsequent to purchase are not recorded in the accounts. |
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