Basic Underlying Accounting Principles精品分析.pptVIP

Basic Underlying Accounting Principles Revenue Recognition Persuasive evidence of an arrangement exists. Delivery has occurred or services have been rendered The seller’s price to the buyer is fixed Collectibility is reasonably assured * Basic Underlying Accounting Principles The Matching Concept Requires that revenue and expenses related to generating the corresponding revenue be recorded in the same period. As a sale is made, the appropriate charges for COGS or other expenses should be consistent from one accounting period to the next. * Basic Underlying Accounting Principles Historical Cost Is the proper basis for the recording of assets, expenses, equity, etc. Full Disclosure The financial statements of a firm must include all information necessary for the formation of valid decisions by the users. * Basic Underlying Accounting Principles Consistency Firms must employ consistent accounting procedures from period to period. Variations or changes in accounting policy and procedures must be justifiable. Standards used to value inventory, depreciate assets, or accrue expenses must be consistent from one accounting period to the next. * Basic Underlying Accounting Principles Objectivity Accounting records must be designed and kept on objective rather than subjective evidence. Underlying verifiability must exist for the information contained in the financials. The historical cost must be verifiable through legitimate proof of purchase. * Basic Underlying Accounting Principles Separate Entity Assumption Economic activity of an entity must be kept separate from other personal or business entities * Basic Underlying Accounting Principles Going Concern – Continuity Assumption There is an assumption that the life of an entity will be long enough to fulfill its financial and legal obligations. Any evidence to the contrary must be reported in the financial statements of an entity. * Basic Underlying Accounting Principles Unit of Measure All financial report