Quiz 1 Flashcards
Periodicity
Providing financial information in a specific time period
2 classification of periodicity
Calendar year and fiscal year
Going concern meaning
Magpapatuloy ang business indefinitely
Objectivity principlle
All transactions must be supported by verifiable evidences
Historical cost
All properties and services acquired must be recorded at its original cost
Accrual principle
A revenue will only be regarded as revenue if the service or product has been rendered
Expense recognition principle
Expense is recognized the the product has been used
Adequate disclosure
All essential information in a financial statement must be included
Materiality
It refers to an important event that happened in a financial statement. This is subjective since some company may take an instance an immaterial while the other company will refer to this as material.
Consistency
Approaches used in reporting must be employed from time to time. Any changes must be clearly explained
General journal
Book of original transactions/entries
General ledger
Book of final entries. Dito na yung nilalagay sila sa same account
Financial statement
End product of accounting
Cost vs expense
Cost - money spent to acquire an asset
Expense - money spent for ongoing operations in order for the business to ensure revenue.
Explain management science
It uses a quantitative approach in solving a problem
