Chapter Two Assignment Save this document as a WORD document. Be sure to put your name on the document.

Name:____Lauren Speakes_______ Define the terms listed below in your own words on this form. Be sure to use good grammar and correct spelling. When you have completed the assignment be sure to save it again. Submit the assignment on MOODLE on Chapter Two Assignment Submission no later than Wednesday, September 7th at 8:00 am. The time that you submit the work is recorded by MOODLE. No late work will be accepted. 1. Comparability is an enhancing qualitative characteristic of accounting information, which describes information that is measured and reported in a similar manner for different companies. 2. Conceptual framework is for the accounting profession, a coherent system of objectives and fundamentals established by the FASB, which determine the nature, function, and limits of financial accounting and which lead to consistent accounting standards. 3. Conservatism is the convention in accounting that dictates that when in doubt, choose the solution that will be least likely to overstate assets and income. 4. Consistency is an aspect of comparable information, which indicates that a company applied the same accounting treatment to similar events from period to period. 5. Economic entity assumption is an assumption that economic activity can be identified with a particular unit of accountability, by keeping an enterprises economic activity and distinct from that of its owners and any other business unit. 6. Full disclosure principle is an accounting principle that dictates that in deciding what information to report, companies follow the general practice of providing information that is of sufficient importance to influence the judgment and decisions of an informed user. 7. Expense recognition principle is an accounting principle that dictates that the recognition of expenses is related to net changes in assets and earning revenues, that is, let the expense follow the revenues. 8. Materiality- a company-specific aspect of relevance, an item is said to be material if its inclusion or omission would influence or change the judgment of a reasonable person. 9. Monetary unit assumption- accounting assumption that money is the common denominator of economic activity and provides and appropriate basis for accounting measurement and analysis. 10.Predictive Value- one characteristic of relevant information, indicating that information must help users predict the ultimate outcome of past, present, and future events. 11.Relevance- one of the qualitative characteristics of accounting information, which describes information capable of making a difference in a decision. 12. Periodicity accounting assumption that implies that a company can divide its economic activities into artificial time periods.

13. Going concern assumption accounting assumption that a company will continue in operation for the foreseeable future. 14. Assets - A probable future economic benefit obtained or controlled by a particular entity as a result of past transactions or events 15. Liabilities - Probable future sacrifices of economic benefits, arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events. 16. Equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid 17. Revenue - In governmental fund type accounts, revenues are increases in net current assets and are recognized in the accounting period in which they become measurable and available.

18. Expenses - Decreases in net total assets. Expenses represent the cost of operations incurred during the current period regardless of the timing of the related disbursements.

19.Gains is a change in the value of an asset (increase) or liability ( decrease) resulting from something other than the earnings process. 20.Comprehensive Income - the change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from nonowner sources.