Accounting Principles

This principle states that revenues with expenses should match to know the profit of the business.

• Consistency principle

• Cost principle

• Matching principle

This principle helps us in not overstating income, understating expenses, over-valuing assets or understating liabilities.

• Conservatism

• Materiality

• Revenue Recognition Principle

This principle states that when one adopted an accounting method, he should continue to follow it consistently in future accounting periods.

• Matching principle

• Full Disclosure Principle

• Consistency Principle

The cost principle states that amounts shown in financial reports are __________ costs.

___________ refers to the impact of an omission or misstatement of information in a company’s financial statements on the user.

Full Disclosure Principle states that sufficient information should be provided for informed judgments.

• TRUE

• FALSE

Objectivity states that recording and reporting process should be performed with independence which is free from ____.