Flashcards
Sem título
Flashcards do conjunto (15)
- 1AssetsAssets are resources controlled by the entity, as a result of past events, that will provide future economic benefits.
- 2LiabilitiesLiabilities are present obligations of the entity resulting from past events, the settlement of which will result in an outflow of future economic benefits.
- 3RevenueRevenue is inflows of economic benefits, or savings in outflows in the form of an increase in assets or a decrease in liabilities, that lead to an increase in owner's equity, except for capital contributions.
- 4ExpensesExpenses are outflows of economic benefits, or reductions of inflows in the form of decrease in assets or increase in liabilities, that lead to a decrease in owner's equity, except drawings.
- 5EntityThe business is a separate accounting entity from its owner and from other entities. The personal transaction of the owner should therefore be recorded separately from those of the business.
- 6Going concernIt is assumed that the business will be ongoing, i.e. it will have an indefinite life span. Applying this priniciple allows for the separate reporting of assets, which will provide benefit in future reporting periods, and expenses, which will be completely consumed in the one reporting period.
- 7Reporting periodWhile it is assumed that the business has an indefinite life(see Going concern), the business life is divided into equal periods of time(e.g. a year) for the purpose of preparing financial reports. It is important that only expenses and revenues relevant to that reporting period are recorded.
- 8ConservatismThis relates to accountants being conservative or cautious when preparing reports - that is to say, only recognising gains when they are earned, but recognising losses as soon as they are expected.
- 9Monetary unitFinancial events are measured and recorded in currency. In our case it is the Australian dollar. Applying this principle promotes understanding of the reported information.
- 10Historical costTransactions are recorded at their original value(as indicated on source documents)
- 11ConsistencyThe accounting methods used by the business should be consistent over the reporting periods.
- 12ReliabilityThe best way of ensuring that the information reported is accurate(reliable) is to have documentation as evidence of financial transactions. This helps to remove bias and material error.
- 13RelevanceReport information should be useful (and hence relevant) to assist the users of the reports to assess the performance of the business. This helps the users of reports to make decisions about past, present of future events of the business.
- 14ComparabilityIt is important for users to be able to make comparisons of the financial reports of an entity from one reporting period to the next, and also to make comparisons against other entities. To make this possible, transactions must be recorded in a consistent way.
- 15UnderstandabilityReports should be prepared in such a way that users can understand what they say or show. It is assumed that users will have a reasonable level of financial knowledge.
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- 12 Accounting FlashCards sobre Sem título, criado por forlyne em 06-01-2014.
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