Q 1. Identifying Entity concept Periodicity Unit of Measure Objectivity Involves an arm's length transaction between two in- dependent parties Verifiability Adequate Disclosure Consistency 10. Going Concern Mock Board Reviewer (Theories ) Study online at https://quizlet.com/_16mhfn when accounting process is the recognition or non-recognition of business activities as ac- countable events. the financial affairs of a firm and its owners are kept separate for the purpose of preparing accounts. During the lifetime of an entity, accountants produce financial statements at arbitrary points in time accordance with which basic account- ing concept? Stating assets and liabilities and changes in them in terms of a common financial denom- inator is a prerequisite in measuring financial position and periodic net income. states that an accounting transaction should be supported by sufficient evidence to allow two or more qualified individuals to arrive at essentially similar conclusion. objectivity is assumed to be achieved when accounting transaction The principle of objectivity includes the concept of this principle requires relevant information to form part of financial statements for deci- sion-making purposes. Accounting changes often made and the mon- etary impact as reflected in the financial state- ments of a company eventhough, in theory, this may be a violation of the accounting concept ofQ 11. 12. 13. 14, 15. 16. 17. 18. Relevance Substance over form Profit-oriented Objective Measurement, processing and communication of fi- nancial information about ble economic Matching Periodicity Recording data Mock Board Reviewer (Theories ) Study online at https://quizlet.com/_16mhfn if the business is not being sold or close the amounts reported in the accounts for assets used in the business operation are based on cost of the assets. This practice is justified by it is the capacity of information to make a dif- ference in decision by helping users evaluate past, present and future events, or confirming or correcting their past evaluations. in the event of conflict between the economic substance of a transaction and its legal form, the economic substance shall prevail. This con- cept is known as the conceptual framework of accounting sets out certain essential characteristic of account- ing information. Which of the following informa- tion is not an essential characteristic Proponents of historical cost maintain that in comparison with all other valuation alternatives for general purpose financial reporting, state- ments prepared using historical cost are more is an appropriate definition of accounting not recognizing any expense unless some rev- enue is realized. involves the dividing the life of a business entity into accounting periods of equal length thus enabling the financial users to periodically eval- uate the results of business operationQ 20. 21, 22. 23. 24. 25. . Consistency Stable Monetary Unit Stable Monetary Unit Provide quantitative finan- cial information about busi- ness enterprise that is use- ful in making rational eco- nomic decision Generally Accepted Ac- counting Principle Relevance Completeness Mock Board Reviewer (Theories ) Study online at https://quizlet.com/_16mhfn the measurement phase of accounting is ac- complished by when preparing the accounts of a firm, one should normally account for similar items in the same way from one accounting period to the next accountants do not recognize that the value of peso changes over time. The concept is called the the financial statements should be stated in terms of common financial denominator. basic purpose of accounting is they encompass the conventions, rules and procedures necessary to define what accepted accounting practice is the financial accounting information is directed towards the common needs of users and is independent of presumptions about particular needs and desires of specific users. the result of standard of adequate disclosure.