Accounting ConceptNotation

Accounting period conceptP

Adequate disclosure conceptD

Business entity conceptB

Cost conceptC

Going concern conceptG

Matching conceptM

Objectivity conceptO

Unit of measure conceptU

Statements:

1.Assume that abusinesswill continue forever.

2.Material litigation involving thecorporationis described in a note.

3.Monthly utilities costs are reported asexpensesalong with the monthlyrevenues.

4.Personal transactions of owners are kept separate from the business.

5.This concept supports relying on an independent actuary (statistician), rather than the chief operating officer of the corporation, to estimate a pensionliability.

6.Changes in the use of accounting methods from one period to the next are described in the notes to thefinancial statements.

7.Land worth $800,000 is reported at its original purchase price of $220,000.

8.This concept justifies recording only transactions that are expressed in dollars.

9.If this concept was ignored, the confidence of users in the financial statements could not be maintained.

10.The changes in financial condition are reported at the end of the month.