Accounting Concepts
- Created by: Natalie
- Created on: 08-12-20 16:20
Other questions in this quiz
2. Business entity
- Each financial transaction is recorded by two equal in value and opposite accounting entries.
- Personal assets/liabilities are kept separate from those of the business.
- Items that are of very low monetary value are not recorded separately.
- Where there is doubt, a conservative (lower) figure for profit/assets should be reported.
3. Going concern
- Assets and liabilities are recorded in the financial statements at historical cost.
- Presumes that the business will continue to trade in the forseeable future.
- Personal assets/liabilities are kept separate from those of the business.
- Revenue for goods can only be recorded when the legal title passes between buyer and seller.
4. Cost
- When a business adopts a particular accounting policy, this is used every time unless there is a good reason to change it.
- Assets and liabilities are recorded in the financial statements at historical cost.
- Expenses/incomes for goods and services are matched to the same period.
- Presumes that the business will continue to trade in the forseeable future.
5. Asset valuation
- Cost
- Realisation
- Business entity
- Accruals
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