Introduction To Accounting Flashcards
Purpose of capital expenditure
- Acquire long term assets
- Improve/enhance earning capacity of long term assets
Purpose of revenue expenditure
- Trade (business) purposes (wages, buying, admin)
- Maintaining earning capacity of long-term assets
Capital expenditure recognised
As asset (BS)
Revenue expenditure recognised as
Expense (PL)
What kind of liability is bank overdraft always!?
Current liability
What are accruals a type of?
Payable
5 IESBA ethical principles
- Integrity
- Objectivity
- Professional competence and due care
- Confidentiality
- Professional behaviour
Integrity
Straightforward and honest in all business relationships
Objectivity
Not allowing bias, conflict of interest or undue influence of others to override professional or business judgements
Professional competence and due care
Maintain professional knowledge
Professional behaviour
Comply with laws+regulations
Avoid discrediting profession
Type of system ICAEW code of ethics is
Principles-based
Conduct + public interest
Business/separate entity concept
Financial statements should only show the activities of the business (not personal activities of owners)
Business separate from owner
Money brought into business by owner
Capital
Money taken from business from owner
Drawings
