ACCOUNTING CONCEPTS Definition

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ACCOUNTING CONCEPTS are the assumptions underlying the preparation of financial statements, i.e., the basic assumptions of going concern, accruals, consistency and prudence.

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LEMON is a. an investment with a poor or negative rate of return or a purchase made where the product has continuing problems, e.g. a lemon of an automobile; or, b. an asset that is in continual need of repair, e.g. an automobile can be referred to as a lemon.

FINANCIAL RATIO is the result of dividing one financial statement item by another. Ratios help analysts interpret financial statements by focusing on specific relationships.

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