some Underlying Accounting Principles

Underlying Principles – Basic general rules detailed accounting are built - always keep this in mind with the FASB Conceptual Framework.
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• Historical Cost – business transaction should be recorded at original cost, as it is the most objective use in accounting.
• Revenue Recognition – revenue is recognized when earned, realizable, and collectible.
• Matching Principle – match revenue and expenses in the same time-period.
• Consistency – entity should apply the same accounting procedures from period to period (enhancing comparability).
• Full Disclosures – All material information should be disclosed in financial statements – any necessary information that helps influence decisions
• Objectivity – Independent and free of bias
• Verifiability – Information is objectively obtained
• Economic Entity (Separate Entity) – Economic activities of business and owners are kept separate.
• Continuity/Going Concern – Assumption that an entity will be live long enough to accomplish objectives and legal obligations.
• Unit of Measure – monetary unit that financial data should be measured.
• Periodicity – life of business is divided into artificial time periods.