test 5th feb Flashcards
accoutning entity concept
states that the business’s financial affairs and those of the owner must be kept seperate
sandras personal financial affairs must be kept seperate from the financial affairs of super washes. personal expenese are to be recorded as drawings
historical cost
transactions are recorded at the orignial aquistion cost
super washes will record vehicles at their original aquisition cost of $20,000
period reporting
the life of a business is divided into equal periods in order to measure profit and position, and to compare performnce to previous periods
super washes prepares its financial reports on 31 march 2017 to measure profit and position, in order to compare performance to previosu periods
accural business
transactions are reported in the finanical statements of the period they relate to, regardless of when cash is exchanged
super washes are to report transcations in the financial statements of the period they relate to. the waages owing will be reported as an expense and as a liability
going concern
it is assumed that the business will continue to operate in the forseeable future
super wahes financial reports are prepared on the assumption that super washes will continue to operate into the forseeable future
monetary measurement
the value of transactionss is measured and reported in nz dollar terms
in the financial reports of super washes only items which can be measured in terms of $NZ will be reported, for example premises $80,000
