Home
Flashcards
Preview
Lisa
Home
Get App
Take Quiz
Create
Objective of Financial Reporting
To provide useful economic information to external users for decision making.
Accounting Assumptions
Separate Entity
: Activities of the business are separate from activities of owners.
Continuity
: The entity will not go out of business in the near future.
Unit of Measure
: Accounting measurements will be in US dollars.
Historical Cost Principle
Requires assets to be recorded at historical cost that, on the date of transaction, is cash paid plus the current dollar value of all non cash.
Transactions
Events recorded as part of accounting process.
External Events
: exchanges of assets and liabilities between the business and one or more other parties.
Internal Events
: Not exchanges between the business and other parties but have a direct effect on the accounting entity.
Account
Organized format companies use to accurate money effect on transactions.
Dual Effect
Every transaction affects at least 2 accounts.
T-Accounts
Debts always on left side
Credits always on Right side
Journal Entry
Accounting method for expressing the effects of a transaction on accounts.
Author
lisrosey
ID
36644
Card Set
Lisa
Description
Chap 2
Updated
2010-09-22T21:52:26Z
Show Answers
Home
Flashcards
Preview