Chapter 1: Introduction to Accounting Flashcards
1
Q
What is Capital Expenditure?
A
Capital Expenditure in incurred when we acquire long-term assets or to improve or enhance the earning capacity of long term assets
2
Q
What is Revenue Expenditure?
A
Revenue Expenditure is incurred either for trade purposes including the purchase of raw materials, wages and salary expenditure and selling and distribution expenses, or to maintain the existing earning capacity of long term assets.
3
Q
What are the 5 IESBA Code of Ethics?
A
O - Objectivity
P - Professional Behaviour
P - Professional Competence
I - Integrity
C - Confidentiality
4
Q
Are the IESBA and ICAEW Ethics codes rules based or principles based?
A
Principles based - principles based is more adaptable and encourages compliance.
5
Q
What are the downsides to rules based codes?
A
- Rules cannot keep up with the rapidly changing environment
- Rules can result in the individuals seeking ways to fins a way around the rules set out
