Chapter 2 framework, presentation and usage y foundations of gaaps (principle based) Separate entity transactions of business separate from personal transactions of. Stable dollar/unit-of-measure only items that can be measured into a monetary unit. Time period life of company can be reported over a series of short time periods. Going concern/continuity entity is expected to continue its operations. Justifies use of owners cost principles can be included. Purchasing power of the unit of measure does not change over time. necessary to prepare annual financial statements. evidence rather than subjective judgement. Exchanging object for service is more judgemental. (ex. Exchange a computer costing 500 for 000 worth of labour, recording is based on cost of computer) Historical cost assets and liabilities are recorded on a basis of what you piad objectivity amount used in recording transactions are to be based on objective. Revenue recognition revenue be assigned to the accounting period which is earned.