Something that you own and don’t owe any money on. Anything of value that you own. House, car, stocks and bonds, businesses you own, boat, etc. Liability- things that you may owe for. Such as, payroll for employees, suppliers, financial institutions. Net assets what your asset is worth. What the “book value” of it is. Like for a car you could look in the Blue Book and find out what your vehicle is worth that would be the net value. Going concern. Where the auditor decides that your business may fail so he/she must indicate that there is concern at the time of the audit.
Then in the event of bankruptcy a forced auction will be done and it will be sold for a much lesser value.
Conservatism matching- What I am getting out of this in my own words is that the auditor will look at the potential risks that a business has made and decide if there will be a potential loss or gain.
Cost- Cost is pretty self-explanatory. It is the cost of an item or service rendered.
Objective evidence- When an appraiser only has one thing to go on as far as the price is. Like one may show a deed where there was a cleared check for a purchase over 10 years ago but that does not mean that he home is worth that now.
The price could have increased or decreased. This is kind of misleading. Materiality. When insignificant errors in accounting can be made, based on how much the monetary value is to the company. Consistency. Something that is a constant. Like using a certain style of accounting. You would do what you normally do that is consistent. Full disclosure. You should be given all pertinent information that will affect your business. You must have full disclosure to know what is going on.
