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 | Definition |
(1) Transaction | A. Economic resources to be used o r turned into cash within |
(2) Continuity assumption | one year. |
(3) Balance sheet | B. Reports assets, liabilities, and stockholders ‘ equity. |
(4) Liabilities | C. Business transactions are separate from the transactions of |
(5) Assets = Liabilities + | the owners . |
Stock holders Equity | D. Increase as sets ; decrease liabilities and stockholders’ equity. |
(6) Note payable | E. An exchange between an entity and other parties. |
(7) Conservatism | F. The concept that businesses will operate into the |
(8) Historical Cost principle | foreseeable future . |
(9) Account | G. Decrease asset s: increase liabilities and stockholder’s equity. |
(10) Dual effects, | H. The concept that asset s should be recorded at the amount |
(11) Retained earning, | pa id on the exchange date . |
(12) Current assets | I. A standardized format used to accumulate data about each |
(13 ) Separate -entity assumption | item reported on financial statements. |
(14 ) Reliability | J. Amounts owed from customers . |
(15) Debits | K. The fundamental accounting mode l. |
(16 ) Account s receivable | L. The two equalities in accounting that aid in providing |
(17) Unit-o f-measure assumption | accuracy. |
(18) Materiality | M. The account that is credited when money is borrowed |
(19) Relevance | from a bank . |
(20) Stockholders equity | N. The concept that states that accounting information should |
| be measured and reported in the national monetary un it. |
| O. Cumulative earnings of a company that are not distributed |
| to the owners. |
| P. Probable debt s or obligations to be paid with asset s or services . |
| Q. Ever y transaction has at least two effects. |
| R. Financing provided by owners and by business operations. |
| S. The concept to exercise care not to overstate assets and |
| revenues or understate liabilities and expense s. |
| T. Useful information has predictive an d feedback value. |
| U. Relatively small amounts not likely to influence users’ decisions |
| are to be recorded in the most cost-beneficial way. |
| V. Probable economic resources expected to be used or turned |
| into cash beyond the next 12 months. |
| W. Useful information should be verifiable, unbiased. and representative of reality. |
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