Chapter 3, Problem 1EA

Match the correct term with its definition.

A. cost principle	i. if uncertainty in a potential financial estimate, a company should err on the side of caution and report the most conservative amount
B. full disclosure principle	ii. also known as the historical cost principle, states that everything the company owns or controls (assets) must be recorded at their value at the date of acquisition
C. separate	iii. (also referred to as the matching principle) matches expenses with associated revenues in the period in which the revenues were generated.
D. monetary	iv. business must report any business activities that could affect what is reported on the financial statements
E. conservatism	v. system of using a monetary unit by which to value the transaction, such as the US dollar.
F. revenue	vi. period of time in which you performed the service or gave the customer the product is the period in which revenue is recognized.
G. expense	vii. business may only report activities on financial statements that are specifically related to company operations, not those activities that affect the owner personally.