Accounting Concepts

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  • Created by: Hannah
  • Created on: 01-05-13 21:53
M S M C O N S I S T E N C Y G H H O D B F
X G A K G H Y D J S B D R F T I W S N G S
W B U S I N E S S E N T I T Y S B H W X Y
I W N G E J X Y L P X L M T H T E U V W N
Y J A X U D O L A D T O N N G O C W S S I
B U G U O B J E C T I V I T Y R N D Y K D
G O N D R C D O O C S W I S F I E F M D N
O W R G O I N G C O N C E R N C D T A P M
Y G M S Q H Q C K S Q B B K V C U J T J F
N H M H K V D L E B F P H F F O R Q E L M
M Y U U M D N S M J P C S U E S P A R E Y
R U R T Q B X B H S H F M P M T U V I D P
U J Y X Q V C X B B S U F U S K A L A X R
I R E A L I S A T I O N C K C R U C L E C
A C C R U A L S M A T C H I N G I Y I B H
Y Q W V K V E U X R H F R V I C N B T D F
E P B F B J D Q V G M Q O L G P I Y Y O N
M C U E M P Q Y U D C O K I J O N L U A K
S C C J W N C M K R Q I N X V U T Y I O V
N M C M O V B F W W H X B S K Y Y L N V G
G P F X F L J J H C S V Y X F S E W C N T

Clues

  • 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)
  • Based on using the orginal cost of the item instead of it's current value. (8, 4)
  • 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)
  • Financial accounts should be produced as factually accurate as possible; should be based on facts rather than opinions and bias. (11)
  • Materiality is important as it relates to the siginifcance of the transaction, dicussing whether is it material or immaterial. (11)
  • The business accounts should be treated separately from the owner's accounts. (8, 6)
  • The expense should match the revenue which relates. Revenue and expenses should be recognised in the same accounting period. (8, 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)
  • When making an estimate an accountant will tend to: underestimate revenue and overstate expenses to not give an favourable view. (8)

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