Matching Definitions with Terms
Match each definition with its related term by entering the appropriate letter in the space provided. There should be only one definition per term (that is, there are more definitions than terms).
Term
______ (1) Separate-entity assumption
______ (2) Historical cost principle
______ (3) Credits
______ (4) Assets
______ (5) Account
Definition
A. = Liabilities + Stockholders’ Equity.
B. Reports assets, liabilities, and stockholders’ equity.
C. Accounts for a business separate from its owners.
D. Increase assets; decrease liabilities and stockholders’ equity.
E. An exchange between an entity and other parties.
F. The concept that businesses will operate into the foreseeable future.
G. Decrease assets; increase liabilities and stockholders’ equity.
H. The concept that assets should be recorded at the amount paid on the date of the transaction.
I. A standardized format used to accumulate data about each item reported on financial statements.