Concepts Flashcards

To learn basic concepts of Accounting

1
Q

Accounting Entities

A

The financial affairs of the entity are kept separate and distinct from the financial affairs of the owner

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2
Q

Period Reporting

A

The lifetime of the business is divided into nominated time periods of equal length, usually a year.

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3
Q

Going Concern

A

The financial reports are prepared on the assumption that the life of the business is expected to continue to operate into the foreseeable future.

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4
Q

Historical Cost

A

Transactions are recorded at the amount of cash paid or payable at the time of the transaction

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5
Q

Monetary Measurement

A

Financial transactions must be measured in a common currency such as NZ$ for New Zealand businesses

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6
Q

Accrual Basis

A

Transactions are recognised when they occur and are recorded and reported in the financial reports of the period to which they relate

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