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Prepare a list of your Top Five Financial Concepts

This course has introduced a variety of financial accounting topics. Please reflect on what you have learned.

Then prepare a list of your Top Five Financial Concepts to post on the Financial Accounting Concepts Discussion Board.

You should write at least three sentences to explain each concept.

You can state that you found the concept interesting or that you liked the concept. However, those statements will not count toward the three sentences that are required to explain each concept.

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1. Historical cost

This is the concept that records transactions at what you paid for it. That is, you don't update the amount for changes in the value of the item. An example would be land that was purchased 20 years ago. It might be worth a lot more today, but the financial statements would still report it at the price paid two decades ago because of the concept of historical cost.

2. Economic entity

This is the concept that financial statements report on only one entity. This means that if you have a business, you cannot co-mingle your personal funds with the business - as they are two separate entities. It also means that the customer and the firm are both recording the transaction but on opposite sides-one is earning revenue and the ...

Solution Summary

Your tutorial is 471 words and explains the concepts of historical cost, economic entity, accrual basis accounting, going concern, and generally accepted accounting principles.