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

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.

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

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

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

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.

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

Specifies that revenue should be recognized when it is earned and realizable, regardless of when the cash is actually received.

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