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Assumes that an entity will continue to operate indefinitely, unless there is evidence to the contrary.

Revenues and expenses are recognized when they are earned or incurred, not necessarily when cash is received or paid.

Involves a degree of caution in the face of uncertainty, aiming to ensure assets and income are not overstated, and liabilities and expenses are not understated.

Stipulates that a company should use the same accounting methods and principles from period to period, which allows for meaningful comparison of financial statements.

Assets should be recorded and reported at their original purchase cost and not adjusted for market changes.

Separates business transactions from the personal transactions of its owners, suggesting that business operations should be accounted for individually.

States that any information that can potentially influence an informed decision maker should be included in the financial statements.

Dictates that expenses should be matched with revenues whenever it is reasonable and practicable to do so, to reflect the true earnings of a company during a period.

Suggests that financial statements should disclose all items significant enough to potentially influence the decision making of an informed user.