ACCT 2001 Study Guide - Fall 2018, Comprehensive Midterm Notes - Accounting Equation, Income Statement, Retained Earnings
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ACCT 2001 Full Course Notes
Verified Note
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Document Summary
Gaap- (generally accepted accounting principles) the standards that accountants follow. Ethics- the process that individuals use to evaluate their conduct in light of moral principles and values. The cost principle- requires that assets be recorded at the price originally paid to acquire them (historical cost) The going-concern concept- accounts assume that a company will continue to operate indefinitely unless there is evidence to the contrary. The objectivity principle- whenever possible, amounts used to record business transactions should be based on objective evidence. Stable dollar concept- assumes that the dollar is sufficiently free from changes in purchasing power to be used as the basic unit of measure in accounting. Investment by owners & revenues increases owners" equity. Owners" equity increases when owners invest assets in a business. Common stock- shows the amount of the owner"s" investment in a. Retained earnings- represents the cumulative total of net income, net loss, and dividends since the start of the corporation.
