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The Following Are Characteristics, Assumptions, Principles, Or Constraints That Guide The FASB When It Creates
The following are characteristics, assumptions, principles, or constraints that guide the FASB when it creates accounting standards.
Relevance
Faithful representation
Comparability
Consistency
Monetary unit assumption
Economic entity assumption
Expense recognition principle
Time period assumption
Going concern assumption
Historical cost principle
Full disclosure principle
Materiality
Match each item above with a description below.
1. Ability to easily evaluate one company’s results relative to another’s.
2. Belief that a company will continue to operate for the foreseeable future.
3. The judgment concerning whether an item's size is large enough to matter to decision-makers.
4. The reporting of all information that would make a difference to financial statement users.
5. The practice of preparing financial statements at regular intervals.
6. The quality of information that indicates the information makes a difference in a decision.
7. A belief that items should be reported on the balance sheet at the price that was paid to acquire the item.
8. A company’s use of the same accounting principles and methods from year to year.
9. Tracing accounting events to particular companies.
10. The desire to minimize bias in financial statements.
11. Reporting only those things that can be measured in monetary units.
12. Dictates that efforts (expenses) be matched with results (revenues).
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