Concepts Flashcards
1
Q
Consistency
A
Consistently use the same policy.
2
Q
Accruals
A
Transactions should be matched to the financial period in which they occurred, regardless when paid.
3
Q
Prudence
A
Using the lowest price - being cautious
4
Q
Objectivity
A
Only objective facts go in the accounts
Source documents needed for proof
5
Q
Cost
A
Non Current Assets are recorded at cost
6
Q
Realisation
A
Profits are realised when sales are made
There is no effect on cash
7
Q
Materiality
A
If immaterial (unimportant) leave it out
8
Q
Business entity
A
Accounts of the business and owner are separate
9
Q
Going concern
A
Assume the business is continuing to trade for the foreseeable future.
