GAAP

Authoritative rules, practices, and conventions meant to provide both broad guidelines and detailed procedures for preparing financial statements and handling specific accounting situations.

Entity conceptIn accounting, the separate entity concept treats a business as distinct and separate from its owners. It is

necessary to record the business's transactions separately, to distinguish them from the owner's personal

transactions

Going concern

Currently operating business that is expected to continue to function as such and remain viable in the foreseeable future.

Accounting period

Accounting concept that the operating cycle of a firm can be divided into distinct accounting periods (a month or a quarter, for example) of relatively short lengths for which accounting information can be collected, matched, and reported in a timely manner.

Stable dollar

Financial statements must b prepared is currency that is stable and has not much fluctuations e-g dollar

objectivity principle  

An accounting principle that states that a company's financial information be based on verifiable data.

COST PRINCIPLE

Accounting concept that goods and services purchased should be recorded at their historical cost and not at their current market value.

realization principle

An accounting standard that recognizes revenue only when it is earned. Generally, realization occurs when goods are sold or a service is rendered.

Matching Principle

It states that, in measuring net income for an accounting period, the costs incurred in that period should be matched against the revenue generated in the same period.

Consistency

Basic accounting concept that once an accounting method is adopted, it should be followed consistently from one accounting period to the next. If, for any reason, the accounting method is changed, a full disclosure of the change and an explanation of its effects on the items of the financial statements must be given in the accompanying notes (footnotes). 

Disclosure principle

Disclosure principle states that any and all information that affects the full understanding of a company's financial statements must be include with the financial statements. Some items may not affect the ledger accounts directly. These would be included in the form of accompanying notes.

Materiality

the term materiality refers to the relative importance of an item or event. The item is material if it can influence tha user's decision

Conservatism

Accounting concept that requires recording (recognizing) the expenses and liabilities as soon as possible, but the revenues only when they are realized or assured.