GAAPs - Generally Accepted Accounting Principles

Changes in financial information are reported for a specific period of time in the form of financial statements

• Accounting Period Cycle

• Business Entity

• Consistent Reporting

• Full Disclosure

• Going Concern

Financial information is recorded and reported separately from the owner's personal financial information.

• Accounting Period Cycle

• Consistent Reporting

• Full Disclosure

• Going Concern

• Business Entity

The same accounting principles must be followed in the same way in each accounting period.

• Business Entity

• Consistent Reporting

• Full Disclosure

• Going Concern

• Historical Cost

Financial statements contain all information necessary to understand a business's financial condition

• Business Entity

• Going Concern

• Matching Revenue with Expenses

• Full Disclosure

• Consistent Reporting

Financial statements are prepared with the expectation that a business will remain in operation indefinitely

• Going Concern

• Business Entity

• Full Disclosure

• Materiality

• Objective Evidence

The actual amount paid for merchandise or other items bought is recorded.

• Neutrality

• Business Entity

• Going Concern

• Historical Cost

• Matching Revenue with Expenses

The revenue from business activities and the expenses associated with earning that revenue are recorded in the same accounting period.

• Business Entity

• Going Concern

• Matching Revenue with Expenses

• Materiality

• Unit of Measurement

Business activities creating dollar amounts large enough to affect business decisions should be recorded and reported as separate items in the accounting records and financial statements.

• Neutrality

• Materiality

• Full Disclosure

• Unit of Measurement

• Realization of Revenue

The process of making accounting estimates is free from bias.

• Matching Revenue with Expenses

• Objective Evidence

• Business Entity

• Neutrality

• Full Disclosure

A source document is prepared for each transaction.

• Matching Revenue with Expenses

• Materiality

• Objective Evidence

• Business Entity

• Full Disclosure