Revision Zone Flashcards

1
Q

Asset

A

a present economic resource controlled by the entity as a result of past events and can be measured reliably

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2
Q

Liability

A

a present obligation of the entity to transfer an economic resource as a result of past events and can be measured reliably.

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3
Q

Fundamental Charactersitic - Relevance

A

The information must be relevant to users decision making needs

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4
Q

Fundamental Charactersitic - Faithful Representation

A

The information must be complete, neutral and free from error

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5
Q

Enhancing Charactersitic - Comparability

A

The information must be comparable to other financial statements

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6
Q

Enhancing Charactersitic - Verifiability

A

The information can be verified by different independent observers

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7
Q

Enhancing Charactersitic - Timeliness

A

The information is made available to users in time to influence decision making

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8
Q

Enhancing Charactersitic - Understandability

A

The information should be understandable by users

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9
Q

When should a grant be recognised

A

When there is reasonable assurance that:
- the entity will comply with the grant conditions
- the entity will actually receive the grant

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10
Q

How to treat grants relating to NCA

A

1 - treat as deferred income
2 - reduce the carrying amount of the NCA

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11
Q

How to treat grants relating to income

A

1 - other income in SOPL
2 - reduce related expenses

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12
Q

Treating the grant as Deferred Income double entry

A

1 buying the NCA
Dr NCA
Cr Bank
2 receiving the grant
Dr Bank
Cr Deferred Income
3 Depreciation
Dr Admin Expenses
Cr NCA
4 Releasing the deferred income
Dr Deferred Income
Cr Other Income

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13
Q

deducting the grant from NCA double entry

A

1 Buying the NCA
Dr NCA
Cr Bank
2 Receiving the grant
Dr Bank
Cr NCA
3 Depreciation
Dr Admin Expenses
Cr NCA

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14
Q

Deducting grant from expense double entry

A

Dr Bank
Cr Expense

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15
Q

Treating the grant as other income

A

Dr Bank
Cr Other Income

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