Accounting Concepts 3.0 / 5 based on 1 rating ? AccountingASNone Created by: HannahCreated on: 01-05-13 21:53 598321476 Across 1. Consistency requires that the chosen method should always be applied to all items of the same type in the same accounting period and future periods. Consistency helps compare which is a desirable characterisitic for accounting information. (11) 4. Materiality is important as it relates to the siginifcance of the transaction, dicussing whether is it material or immaterial. (11) 6. Financial accounts should be produced as factually accurate as possible; should be based on facts rather than opinions and bias. (11) 7. Assuming a business will continue to operate for the foreseeable future unless otherwise. Going concern allows assets to stretch their lives into the financial statements ie charging depreciation. (5, 7) 8. Transactions should only be recognised in the P&L a/c when the obligation to pay has been accepted or the goods/services have been passed to customer. (11) 9. The expense should match the revenue which relates. Revenue and expenses should be recognised in the same accounting period. (8, 8) Down 2. When making an estimate an accountant will tend to: underestimate revenue and overstate expenses to not give an favourable view. (8) 3. The business accounts should be treated separately from the owner's accounts. (8, 6) 5. Based on using the orginal cost of the item instead of it's current value. (8, 4)
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