designs and produces products or services of acceptable quality at a cost lower than that of its competitors.

A business designs and produces products or services that possess unique attributes or characteristics which customers are willing to pay a premium price.

• Revenue Recognition Principle
  Recognize revenue when goods are delivered or services are rendered or performed

• Objectivity Principle
  Accounting records and statements are based on the most reliable data available so the they will be as accurate as useful as possible

• Expense Recognition Principle
  Expenses should be recognized when goods and services are used up to produce revenue and not when the entity pays for those goods and services

• Adequate Disclosure Principle
  A company is required to report all relevant information that would affect the user's understanding and assessment of the accounting entity be disclosed in the financial statements.

• Consistency Principle
  Firms should use the same accounting method from period to period to achieve comparability over time with a single enterprise

• Historical Cost Principle
  Accounting information is based on actual cost and not what management thinks they are worth as at reporting date

• Materiality Principle
  Financial reporting is only concerned with information that is significant enough to affect evaluations and decisions.

Going-Concern Assumption
Reflects assumption that the business will continue operating instead of being closed or sold

Monetary Unit Assumption
Express transactions and events in monetary, or money, units.

Time Period Assumption
Presumes that the life of a company can be divided into time periods, such as calendar year, fiscal year and natural business year

Accounting Entity Assumption
A business is accounted for separately from other business entities, including its owner. Also known as business entity assumption or separate entity assumption

Accrual Basis Assumption
Assumes that the recording of income and expense follow the accrual basis, wherein income is recognized when earned and expense is recognized when incurred.