Chapter One- Accounting and Ethical Principles

Question 1

Accrual Accounting

Answer 1

Fundamental accounting concept that states that income and expenses shown in the statement of profit or loss should be those that were earned or incurred during the period rather than simply the cash received or paid.

Question 2

Confidentiality

Answer 2

To respect the confidentiality of information acquired as a result of professional and business relationships.

Question 3

Going Concern

Answer 3

The financial statements are normally prepared on the assumption that an entity will continue in operation for the foreseeable future.

Question 4

Integrity

Answer 4

To be straightforward and honest in all professional and business relationships.

Question 5

Objectivity

Answer 5

To not allow bias, conflict of interest or undue influence of others to override professional or business judgements.

Question 6

Professional Behaviour

Answer 6

To comply with relevant laws and regulations and avoid any action that brings our profession into disrepute.

Question 7

Professional Competence and Due Care

Answer 7

To maintain professional knowledge and skill at the level required.