Accounting Principles and Concepts

The period of time that an asset is expected to help produce
revenues

• Historical Cost Principle

• Depreciation

• Useful Life

• Revenues are earned and recorded when provided, not when cash is received.

• Revenue Recognition Principle

• Expense Recognition Principle

• Matching Principle

• Expenses are recorded when incurred, not when paid.

• Expense Recognition Principle

• Matching Principle

• Revenue Recognition Principle

Match revenues with corresponding expenses to measure net income accurately.

• • Revenue Recognition Principle

• Expense Recognition Principle

• Matching Principle

When is net income computed?

• First

• Last

• Second

• Second to last

(including cash) that will be converted into cash or
consumed within one year or the normal operating cycle,
whichever is longer

• Assets

• Current Liabilities

• Long-Term Liabilities

What does the statement of OE start with as of the
beginning of the accounting period?

• capital account balance

• Assests

• Drawing

How does Owner’s Equity (OE) increase on Statement of Owner’s Equity Preparation?

• Assets

• net income

• Liabilities

What are the two forms of Balance sheets?

• Report Form

• Cash Form

• Account Form

• Receipt Form

Liabilities and owner’s equity sections are shown BELOW the assets
section

• Report Form

• Account Form