Chapter 1 - conceptual & regulatory framework

Question 1

Financial accounting consists of:

Answer 1

1. Recording transactions as they take place
2. Summarising all transactions that have taken place in a period of account

Question 2

Basis of accounting - accruals basis

Answer 2

Transactions recognised when they occur, not when the cashflows happen

Question 3

Basis of accounting - cash basis

Answer 3

only cash is impacted that is recorded

• used for statement of cash flows and small unincorporated entities

Question 4

break up basis

Answer 4

when the business is no longer a going concern