Topic 1: Nature and Purpose of Accounting Flashcards
1
Q
What is the Monetary Concept?
A
The Monetary Concept states that money is used as the measuring unit in recording business transactions
2
Q
What is the Accounting Entity Concept?
A
This concept implies that if an owner uses his own money (not the business) to buy things for his own use, his capital investment in the business is not affected
3
Q
What is Accounting and its Role?
A
It is the process of identifying, measuring, and communicating economic information to permit informed judgements and decisions by users of the information.
The role of accounting is to provide financial information to support and facilitate users’ decision-making
