Extras Flashcards
1
Q
Accounting for Inventory IFRS
A
IAS 2
2
Q
Reasons for stock differences (4)
A
- Delivered items not updated on the system
- Returned goods not on the system
- Stolen inventory
- Errors in counting/ filing store
3
Q
FIFO =
A
First in, first out
4
Q
AVCO =
A
Average cost
5
Q
AVCO Total weighted average =
A
Total number of purchases / Total no units purchased
6
Q
Objective of financial statements =
A
To provide information about the financial position, performance and changes in the financial position of an entity that is useful to a wide range of users in making decisions
7
Q
Underlying assumptions (2)
A
- Accruals > transaction/ event recognised in the period in which it occured
- Going concern > statements are prepared on the basis that the entity will continue in operation for the foreseeable future
8
Q
Qualitative characteristics (2)
A
- Relevance > information must be relevant to decision making needs of the user
- Faithful representation > events/ transactions are accurately represented in the financial statements
9
Q
Reliability (4)
A
- Completeness
- Neutrality
- Free from error
- Substance over form (economic substance over legal form)
10
Q
Characteristics (5)
A
- Comparability
- Verifiability
- Timeliness
- Understandability
- Consistency
11
Q
Fair presentation (3)
A
- Compliant with accounting standards
- Presented in reliable, relevant, understandable manner
- Additional disclosures are provided when required
12
Q
Business entity concept =
A
Treat the business separately to its owner. Transactions of the owner should never be mixed with business transactions
