Answer:
The answer is: False
Explanation:
There are basic accounting principles that must be followed when elaborating financial statements and the more accurate they are, the better. Accountants are considered very meticulous and exact professionals, it´s not the most entertaining career. Some of the most relevant ones are:
<u>Accrual principle:</u> Accounting transactions should be recorded in the periods when they actually occur, and they shouldn´t be artificially delayed or accelerated.
<u>Consistency principle:</u> Once you adopt an accounting method, you should continue to use it until a demonstrably better method comes along.
<u>Reliability principle:</u> Only those transactions that can be proven should be recorded.
<u>Time period principle:</u> A business should report the results of its operations over a standard period of time.
<u>Revenue recognition principle:</u> You should only recognize revenue when the business has completed the earnings process.
<u>Conservatism principle:</u> You should record expenses and liabilities as soon as possible, but to record revenues and assets only when you are sure that they will occur.
<u>Cost principle:</u> You should only record its assets, liabilities, and equity investments at their original purchase costs.
<u>Economic entity principle:</u> Transactions of a business should be kept separate from those of its owners and other businesses.
<u>Full disclosure principle:</u> You should include alongside the financial statements all of the information that may impact a reader's understanding.
<u>Going concern principle:</u> A business will remain in operation for the foreseeable future.
<u>Matching principle:</u> When you record revenue, you should record all related expenses at the same time.
<u>Materiality principle:</u> You should record a transaction in the accounting records if not doing so might have altered the decision making process of someone reading the company's financial statements.
<u>Monetary unit principle:</u> A business should only record transactions that can be stated in terms of a unit of currency.