All assets are recorded at their original purchase price in the finacial accounting expenses of the business
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Accural Basis
transactions that are reported in the period to which they relate. As such we makw a balance sheet date adjustment to recognise any outstanding assets and liabilities
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Period Reporting
The lifetime of the business is broken up into periods of equal length (e.g One year) for the purpose of reporting and comparison
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Going Concern
The business has prepared their financial reports based on the assumption that as far as they are aware they will continue into the future. this is shown by (business) dividing its assets & liabilities into current & non-current
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Monetary Measurement
All transactions must be measures in a common monetsry unit. E.g $NZ
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Accounting Entity
the personal assets, liabilities and transactions of the owner should be kept seperate from those of the entity
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Depreciation
Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life.
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Expenses
- expenses are a decrease in economic benefits (net profit) - decrease in assets or increase of liabilities that result a decrease in equity - it is not drawings
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Income
- an increase in economic benifit - increase of assets or decrease in liabilities in result increases equity - not owners contribution
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Equity
Assets minus Liabilities
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Liabilities
- A liability has come from a past event - Presently the entity is obligated to repay -Future there will be a future economic sacrifice when it is settled
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Assets
- Past : A resource which has come from a past event - Present: Asset is under present control of the business - Future: The asset will bring future economic benefits to the entity
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Capital Expenditure
One off thing like buying a truck
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Revenue Expenditure
A decrease in asset a day to day expense
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Other cards in this set
Card 2
Front
transactions that are reported in the period to which they relate. As such we makw a balance sheet date adjustment to recognise any outstanding assets and liabilities
Back
Accural Basis
Card 3
Front
The lifetime of the business is broken up into periods of equal length (e.g One year) for the purpose of reporting and comparison
Back
Card 4
Front
The business has prepared their financial reports based on the assumption that as far as they are aware they will continue into the future. this is shown by (business) dividing its assets & liabilities into current & non-current
Back
Card 5
Front
All transactions must be measures in a common monetsry unit. E.g $NZ
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