Introduction to accounting Flashcards
Accounting is a system that _________ infromation that is _________, for users to make better decision
Identify/Record/Communicate
Relevant/Reliable/Comparable
What are the 4 GAAPs?
Revenue Recognition Principle
Cost Principle
Expense Recognition Principle
Full Disclosure Principle
What are the 4 assumptions of GAAP?
- Going concern
- Business Entity
- Time period
- Monetary Unit
What are the two fundamental characteristics of the IASB’s framework?
Relevance and Faithful Representation
What are the 3 factors under relevance in the framework?
Materiality
Predictive value
Confirmatory value
What are the 3 factors under faithful representation in the framework?
Completedness
Neutrality
Free from error
What are the enhanced characteristics of the IASB’s framework?
Comparability
Understandability
Verifiability
Timeliness
Which financial statements are flow statements?
Income statement
Statement of changes in Equity
Statement of cash flow
Which financial statements are stock statements?
Balance sheet (Statement of financial statement
What does Income statement include?
Revenue/Expense/Net Profit over a period of time
What does statement of financial position include?
Shared Capital/Retained Earnings/Total Equity over a period of time
What does statement of changes in Equity include?
Assets/Liability/Equity
What does statement of cash flow include?
Operating and investing expense
