Concepts Achieved Flashcards
What is the definition of Accounting Entity?
The financial affairs of the entity are kept separate and distinct from the financial affairs of the owner
What is the definition of Monetary Measurement?
Financial transactions must be measured in a common currency such as NZ$ for New Zealand businesses
What is the definition of Reporting Period?
The lifetime of the business is divided into nominated time periods of equal length, usually a year.
What is the definition of Going Concern?
The financial reports are prepared on the assumption that the life of the business is expected to continue to operate into the foreseeable future.
What is the definition of Historical Cost?
Transactions are recorded at the amount of cash paid or payable at the time of the transaction
What is the definition of Accrual Basis?
Transactions are recognised when they occur and are recorded and reported in the financial reports of the period to which they relate
