Theory BDA

Question 1

define accrual accounting

Answer 1

ccounting journal entries are made when a good or service is provided rather than when payment is made or received

Question 2

def cash accounting

Answer 2

of recording transactions when cash is received or paid and is measured at that time

Question 2

asset is recognised in statement of finacial position when

Answer 2

it is relevant
there is a faithful representation(info is complete, free form error)

Question 2

asset def

Answer 2

asset is a present economic resource controlled by the entity as a result of past events.

Question 3

liability def

Answer 3

liability is a present obligation of the entity to transfer an economic resource as a result of past events.

Question 3

expenses

Answer 3

decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to distributions to the owner

Question 3

equity def

Answer 3

Equity is the residual interest in the assets of the entity after deducting all its liabilities.

Question 3

icome def

Answer 3

Income is increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from the owner/s

Question 4

Fifo

Answer 4

assumed that the first items to come into the business are the first items to go out of the business.

Question 4

weighted average cost method

Answer 4

multiplying the unit cost of each item in inventory by its respective quantity and then dividing the total cost by the total number of units

Question 4

recoginition criteria fro all of these

Answer 4

relevant
faithful represenation

Answer 4

Accrued Expense L
Prepaid Expense A
Accrued Income A
Income in Advance L
Doubtful Debts E
Depreciation E

Question 5

weighted average cost

Answer 5

total cost of goods for sales/total number of goods

Question 6

purpose of balance day adjustment

Answer 6

to ensure that elements are recognized in the correct accounting period