Accounting
planning, recording, analyzing, and interpreting financial information
liability
(n.) a debt; something disadvantageous
Income
money received, especially on a regular basis, for work or through investments.
Expense
a decrease in owner's equity resulting from the operation of a business
Owner's Equity
the amount remaining after the value of all liabilities is subtracted from the value of all assets
Accounting entity
the organization for which financial data are to be collected
Monetary concept
Use of money as the basis of quantifying items in financial statements.
Historical cost
the actual amount paid for merchandise or other items bought is recorded
Going Concern
financial statements are prepared with the expectation that a business will remain in operation indefinitely
Accounting Period Reporting
period
Accrual Basis
revenues are recognized when earned and expenses are recognized when incurred
Relevance
The quality of information that indicates the information makes a difference in a decision.
Materiality
whether an item is large enough to likely influence the decision of an investor or creditor
Faithful Representation
information that is complete, neutral, and free from error
Timeliness
having information available to decision-makers before it loses its capacity to influence decisions
Comparability
Ability to compare the accounting information of different companies because they use the same accounting principles.