会计英语课件.pptVIP

Accounting Principles Historical Cost Conservatism Objectivity Realization Matching Materiality Consistency Full Disclosure Historical Cost The principle states that the value of merchandise or services obtained through business transactions should be recorded in terms of actual costs, not current market values. Conservatism This principle serves to guide the decisions of accountants in areas that involve estimates and other areas that may call for professional judgment. FASB states that assets and income should be fairly presented and not overstated. Objectivity This principle states that all business transactions must be supported by objective evidence proving that the transactions did in fact occur. Obtaining objective evidence is not always a simple matter. When independent evidence is not available to document the results of a business transaction, estimates must be made. Realization It states that revenue resulting from business transactions should be recorded only when a sale has been made and earned. Matching This principle states that all expenses must be recorded in the same accounting period as the revenue they helped to generate. 2 accounting methods are used to determine when to record the results of a business transaction. Cash Accounting Accrual Accounting Cash Accounting Small business usually follow cash accounting procedures in their day-to-day bookkeeping activities. Accrual Accounting Most hospitality operations use the accrual method of accounting. Materiality It states that material events must be accounted for according to accounting rules; however, insignificant events may be treated in an expeditious manner. Decisions concerning the materiality of events vary. Most of these decisions call for professional judgment on the part of the accountant. Consistency It states that once an accounting method has been adopted, it should be consistently followed from period to period. Full Disclosure This principle states that the financial