12 accounting standards

Comparability

Ability to easily evaluate one company’s results relative to another’s

Going concern assumption

Requirement that a company will continue to operate for the foreseeable future

Materiality

The judgment concerning whether an items size is large enough to matter to decision makers

Full disclosure principle

The reporting of all information that would make a difference to financial statement users

Time period assumption

The practice of preparing financial statements at regular intervals

Relevance

The quality of information that indicates the information makes a difference in a decision

Historical cost principle

A belief that items should be reported on the balance sheet at the price that was paid to acquire the item

Consistency

A company’s use of the same accounting principles and methods from year to year

Economic entity assumption

Tracing accounting events to particular companies

Faithful representation

The desire to minimize bias in financial statements

Monetary unit assumption

Reporting only those things that can be measured in monetary units

Expense recognition principle

Dictates that efforts (expenses) be recognized in the period in which a company uses assets or incurs liabilities to generate results (revenues)