All accounting information should be based on fact. Every transaction must be backed up by documentation
1 of 9
Cost
Assets should be valued at cost or net realisable value whichever is the lowest
2 of 9
Going Concern
When preparing financial statements assume business will continue to trade for forseeable future
3 of 9
Accruals
If profits are calculated for a period of time. Revenue for that year to be matched with expenses for that year too.
4 of 9
Consistency
Apply same accounting policies and procedures from one financial period to the another. Make comparison valid and reliable.
5 of 9
Prudence
Where there is doubt, asset values and profits should be understated than overstated,
6 of 9
Materiality
Ensure that all information provided is significant to the users of the statements.
7 of 9
Realisation
Revenue should be recognized when its certain. That is a sale should only be included in a business profit calculations if cash or a promise to pay cash has occured
8 of 9
Business entity
All transactions recorded in business' accounts only relate to the organisation.
9 of 9
Other cards in this set
Card 2
Front
Assets should be valued at cost or net realisable value whichever is the lowest
Back
Cost
Card 3
Front
When preparing financial statements assume business will continue to trade for forseeable future
Back
Card 4
Front
If profits are calculated for a period of time. Revenue for that year to be matched with expenses for that year too.
Back
Card 5
Front
Apply same accounting policies and procedures from one financial period to the another. Make comparison valid and reliable.
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