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