Save
Busy. Please wait.
Log in with Clever
or

show password
Forgot Password?

Don't have an account?  Sign up 
Sign up using Clever
or

Username is available taken
show password

Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.


Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.

Term

Accounting Entity
click to flip
focusNode
Didn't know it?
click below
 
Knew it?
click below
Don't know

Term

Period Reporting
Remaining cards (19)
Know
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

Accounting Concepts

TermDefinition
Accounting Entity The financial affairs of the business must be kept separate and distinct from the financial affairs of the owner. (Any personal expenses of the owner paid by the business must be recorded as drawings)
Period Reporting The life of a business is divided up into periods of equal length for reporting purposes. (So that the owner can measure the figures with those of previous periods, and trends can be identified- assists with decision making)
Monetary Measurement All transactions are measured in the same currency(the unit common to them all)
Going Concern (Underlying Assumption) States that the entity will continue to operate into the foreseeable future. This means the Balance Sheet values are at historical cost and not at current market value as there is no intention of selling or downscale.
Accrual Basis (Underlying Assumption) Transactions are recognised when they occur. They are recorded in the accounting records and reported in the financial statements of the accounting period to which they relate.
Understandability Information in financial statements must be understandable by users who have a reasonable knowledge of the business and a willingness to study the information with reasonable diligence.
Relevance Must be relevant to the decision making needs of users.
Reliability Free from material bias and error and can be relied and depended upon by users to faithfully represent what it represents.
Comparability Must be able to compare the results over time with those of other entities to identify trends.
Tieliness Information must be up to date and provided without undue delay or it will loose its relevance to decision making.
Balance between cost and benefit The benefits users receive from the information should out weigh the cost of getting that information.
Balance between qualitative characteristics Financial information preparers need to balance or trade off various qualitative characteristics in order to meet their goals.
True and Fair View Statements should be presented fairly and not be misleading.
Revenue Expenditure Is of a recurring nature and affect the Income Statement.
Capital Expenditure Is a one off type spending that usually creates an asset. (Includes transportation ad installation)
Income Statement Purpose- to calculate the profit/deficit for a given period of time. Limitations- depreciation, doubtful debts and does not include and non-financial information.
Balance Sheet Purpose- to report assets, liabilities and equity at a point in time. Limitations- accumulated depreciation, allowance for doubtful debts, no non-financial information, based on historical cost.
Cash Flow Statement Purpose- to report where the money was received from and what the money was spent on during the period. Limitations- does not show credit transactions or non-cash items. Based on past cash receipts and payments and does not show current cash obligations.
Statement of Accounting Policies To inform users of the financial statements about the policies. Includes the entity by name an nature, recognition of the use of the General Accepted Accounting Principles, other significant accounting policies and changes in accounting policies.
Depreciation Depreciation is the systematic allocation of the depreciable amount of the asset over its useful life.
Created by: zoejones97
Popular Accounting sets

 

 



Voices

Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
Retries:
restart all cards