Accounting Theory

Identify this accounting theory:

The life of a business is divided into regular time intervals.

• Accounting Entity

• Accounting Period

• Accrual basis of accounting

• Monetary

Identify this accounting theory: ________

Expenses incurred must be matched against income earned in the same period to determine the profit for that period

Identify this accounting theory.

Business activities that have occurred, regardless of whether cash is paid or received, should be recorded in the relevant period.

• Accounting Entity

• Consistency

• Going Concern

• Accrual basis of accounting

Identify this accounting theory.

The activities of a business are separate from the actions of the owner. All transactions are recorded from the point of view of the business.

• Accounting Entity

• Objectivity

• Historical Cost

• Revenue Recognition

Identify this accounting theory.

A business is assumed to have an indefinite economic life unless there is credible evidence that it may close down.

• Monetary

• Materiality

• Going Concern

• Consistency

Identify this accounting theory.

Only business transactions that can be measured in monetary terms are recorded.

• Monetary

• Materiality

• Matching

• Objectivity