International accounting standards 3 Flashcards
Period (periodicity) assumption
Accountants divide the economic life of a business into
artificial time periods.
Accounting time periods are generally …
a month, a quarter, or a year
Monthly and quarterly time periods are called …
interim periods
what financial statements do companies prepare?
quarterly and annual financial statements
Fiscal Year
Accounting time period that is one year in length.
Calendar Year
January 1 to December 31.
accrual-basis accounting (znaczenie)
rachunkowość materiałowa
Characteristic of accrual-basis accounting:
- Transactions are recorded in the periods in which the events occur.
- Companies recognize revenues when they perform services (regardless of the actual payment).
- Expenses are recognized when incurred (regardless of the actual payment).
- Accrual-basis accounting is in accordance with IFRS, US GAAP and most of the local financial accounting standards.
Revenue is recognized when …
performance obligation is satisfied
Expenses are recognized when …
efforts are made to generate revenue
The Adjusting Entries:
Deferrals: (odroczenia)
- Prepaid expenses
- Unearned revenues
Accruals: (rozliczenia międzyokresowe)
- Accrued revenues
- Accrued expenses
Deferrals are …
expenses or revenues that are recognized at a date later than the point when cash was originally exchanged.
Types of deferrals:
- Prepaid expenses – expenses paid in cash before they are used or consumed; examples are insurance, subscriptions, rent, supplies; concerts, holidays
- Unearned revenues – cash received before services are performed
prepaid expenses (znaczenie):
czynne rozliczenia międzyokresowe kosztów
Prepaid expenses are …
costs hat expire either with the passage of
time (e.g., rent and insurance) or through use (e.g., supplies).
Unearned Revenues (znaczenie)
nierozliczone przychody/ rozliczenia międzyokresowe przychodów (?)
Unearned Revenues
When companies receive cash before services are performed, they record a liability by increasing (crediting) a liability account
Types of accruals:
- Accrued revenues: revenues for services performed but not yet recorded at the statement date;
- Accrued expenses(podobne do bierne rozliczenia międzyokresowe kosztów): expenses incurred but not yet paid or recorded at the statement date.
accruals (znaczenie):
rozliczenia międzyokresowe
Adjusted Trial Balance (znaczenie):
zestawienie sald
Adjusted trial balance:
- Proves the equality of the total debit balances and the
total credit balances in the ledger after all adjustments. - Primary basis for the preparation of financial statements.
Adjusted trial balance:
- Proves the equality of the total debit balances and the
total credit balances in the ledger after all adjustments. - Primary basis for the preparation of financial statements.
The concept of … is an underlying assumption in the preparation of financial statements,
going concern
the concept of going concern (znaczenie)
zasada kontynuacji działalności
