Overview of GAAP Principles (Grade 10 NSC Matric Accounting): Flashcards
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GAAP acronym meaning
GAAP acronym meaning
Generally Accepted Accounting Principles
Historical cost principle
Historical cost principle
Record assets at original purchase price
Historical cost: asset value over time
Historical cost: asset value over time
Remains at original cost despite market value changes
Prudence principle
Prudence principle
Be cautious when uncertain; conservative approach
Prudence rule when uncertain
Prudence rule when uncertain
Choose value least favourable to business's equity
Materiality principle purpose
Materiality principle purpose
Determines what info shown separately in financial statements
Business entity rule
Business entity rule
Business is separate unit from its owner
Business entity: finance separation
Business entity: finance separation
Business finances completely separate from owner's personal
Going concern principle
Going concern principle
Business will continue to operate for foreseeable future
Matching principle
Matching principle
Income and related expenses recorded in same accounting period