Accounting concepts

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Business entity
“Only transactions affecting the business must be recorded in the accounting system
1 of 9
Prudence concept
Assets and profits are always understated rather than overstated
2 of 9
Matching /accruals concept
Expenses and revenues must be matched to the time period in which E or R occurs
3 of 9
Realisation
Profits cannot be assumed until a sale has taken place
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Materiality
Only assets above a certain value can be recorded as non current assets
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Going concern
Business continuing for foreseeable future
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Consistency
Same policy for recording transactions every year
7 of 9
Money measurement
Only events involving money can be recorded in the accounting system
8 of 9
Cost
Assets are recorded at cost price
9 of 9

Other cards in this set

Card 2

Front

Prudence concept

Back

Assets and profits are always understated rather than overstated

Card 3

Front

Matching /accruals concept

Back

Preview of the front of card 3

Card 4

Front

Realisation

Back

Preview of the front of card 4

Card 5

Front

Materiality

Back

Preview of the front of card 5
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